At the height of my student loan journey, I was paying $900 per month towards my student loans while struggling to find work. All of a sudden, everything I had worked so hard for in school started to feel like it was out of reach. I wondered if my debt would ever pay off. At that time, my student loans were taking an emotional toll on me. I felt depressed about my debt and confused about my future.
Student loan borrowers have long known the emotional consequences of debt. However, a new study by researchers at the University of South Carolina and the University of California Los Angeles confirmed this with their findings.
In the first study of its kind, researchers looked at how student loan debt affects the mental health of borrowers. The not-so-surprising results stated that student loans lead to an increase in depression as well as stress. The authors of the study think that student loan debt may be so stressful for borrowers — especially for middle-class borrowers — because they are not eligible for help from the government and their parents aren’t able to significantly help them with their loans.
When I first found out about the study, I nodded my head, understanding completely. I felt validated. It wasn’t just me.
Paying off student loan debt is a journey that goes through many stages, and depression is just one of those steps. In my experience, dealing with student loans can be like a grieving process, akin to psychiatrist Elisabeth Kübler-Ross’ 5 stages of grief (denial, anger, bargaining, depression, and acceptance).
Here’s how I relate my student loan journey to the 5 stages of grief (and you might relate, too).
In the denial stage, you want to bury your head in the sand and pretend your student loans don’t exist. Oh, student loans? Yeah, whatever!
Denial is such a powerful emotion because it keeps us from facing the truth of the situation. I remember that shortly before graduating with my master’s, I created a Mint.com account to help me control my finances. Once I saw exactly how much debt I was in, I promptly deleted my account. At the time, I had $68,000 in student loan debt left, but I wasn’t ready to face the truth. I could not handle that amount. Denial much?
It’s really easy to be in this stage, yet it can do so much harm.
In this stage, it’s unlikely you know exactly how much you owe, what your interest rates are, who your lender is, or even when your due dates are. Denial embraces the adage “ignorance is bliss”.
Many borrowers will attempt to defer their loans in this stage, trying their best to ignore it for as long as they can. Unfortunately, loans will still be there, and their interest rates will just make them that much more bloated when it’s time to face them.
Anger can start to creep in once the ugly truth starts to rear its head. When debt collectors start calling and emailing, and letters start arriving, anger can build up.
Anger at your lender, anger at your school, anger at society, and anger at yourself for taking the stupid loans in the first place. In this stage, many people tend to cast blame or feel irrational anger and jealousy.
I remember that I used to be so envious of my debt-free peers. The worst part about this stage is that anger is so unproductive, while also consuming a lot of energy. A person can get burnt out on anger while making no progress at all toward solving their problem. The worst part? Borrowers can end up alienating people around them.
When the anger subsides, an emotionally affected borrower might start to look for ways out of their situation and bargain with a higher power to help. They might look at their options and think:
- Maybe I can have my loans forgiven and spare myself from paying all of this back?
- Perhaps a wealthy friend or family member might take pity on me and pay my debt, no questions asked (we can dream, right?).
- I wonder if there’s a payment plan with some kind of loophole in it?
- I should start playing the lottery.
This stage can be a bit more hopeful, but it’s still not very productive at solving the problem. Loans aren’t easy to deal with, and while many people may have worked hard in school and feel that they deserve better than the burden of debt, it’s key to face the reality on our own and not look for others to save us or for magical, improbable solutions.
The sooner borrowers can do that, the sooner they can begin to make productive decisions toward dealing with student debt.
When it becomes apparent that your student loans aren’t going anywhere and that they will need to be paid back, depression may set in. Borrowers who come to understand the gravity of their situation might resign themselves to feelings of hopelessness like these:
- I’ll never get out of debt anyway, so what’s the point?
- I’ve failed myself by getting into so much debt without a way to pay it off.
- All the money I make just goes to debt, so why keep working so hard?
These thoughts can have detrimental effects on borrowers with debt affecting mental health as well as hindering their repayment progress.
Depression can often bring along its best friend, apathy too. This duo can make even the simplest tasks seem overwhelming. It’s hard to get ahead when you just stop caring, much less find the resolve to work at paying down your debt.
Relating back to the aforementioned study, depression and stress can go hand in hand. Student loan borrowers may be worried about how they will pay it back, how their loans affect their future goals, and their current reality. It can feel totally overwhelming to manage the day-to-day expenses of life on top of hefty debt payments.
In the final stage, after walking through an array of emotions, borrowers come to terms with their student loan debt. They accept the fact that it won’t magically go away (sad, I know). In this phase, borrowers can look for a plan of action and learn to deal with their student loans, rather than deny them.
While student loan debt may be causing borrowers distress, there are options to make it better. Make some calculations and look at what repayment plan is right for you — should you focus on high interest or smallest balances? For those really struggling to make payments and have federal student loans, look into income-based repayment to help alleviate some of the burden. Borrowers should also consider refinancing, especially if they have PLUS loans, which are known to have hefty fixed interest rates.
So, while student loans do affect us in very real ways, there is some hope out there. But it starts with you. Empower yourself with information, know your rights, and look into other repayment options. And remember, you are not alone. You are not a loan.
Regardless of where you are in this journey, you can make it to the end and say goodbye to debt. And then you can totally just shake it off.
Do any of these stages look familiar? Have you ever felt any links between your debt and mental health?
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|