At the height of my student loan journey, I was paying $900 per month toward my student loans while struggling to find work. I felt depressed about my debt and confused about my future.
Student loan borrowers have long known the emotional consequences of debt. According to a Student Loan Hero survey, 61% of borrowers feared that their student loan worries were spiraling out of control.
In my experience, dealing with student loans can not only cause anxiety, but they can also feel like a grieving process, akin to psychiatrist Elisabeth Kübler-Ross’ five stages of grief (denial, anger, bargaining, depression and acceptance).
Here’s how I relate my student loan journey to the five stages of grief (and you might do, too).
In the denial stage, you want to bury your head in the sand and pretend your student loans don’t exist.
Denial is a powerful emotion because it keeps us from facing the truth of the situation. I remember that shortly before graduating with my master’s degree, 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 left in student loan debt, but I wasn’t ready to face the truth.
It’s really easy to be in this stage, but staying in denial can do so much harm. When you ignore your loans, you probably won’t know how much you owe, what your interest rates are, who your lender is, or even when your payments are due.
You might try to defer your loan payments for as long as possible. Unfortunately, your student loans will still be there, and accruing interest interest 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 rears its head. When debt collectors call and letters arrive, your anger can build up.
You might feel mad at your lender, your school, society or even yourself for taking out the stupid loans in the first place. In this stage, you might cast blame or feel anger or jealousy at others.
I remember that I used to be so envious of my debt-free peers. The worst part about this stage is that anger is unproductive and consumes a lot of energy. A person can get burnt out on anger while making no progress at all toward solving the problem.
Plus, getting angry could end up alienating people when what you really need is a strong support network to help you deal with your debt.
When anger subsides, emotionally affected borrowers might start to look for ways out of their situation. 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. Unfortunately, you can’t wave a magic wand and make your debt disappear.
Looking for miracle cures could also make you susceptible to student loan scams, which make big promises but offer little results. Although there are some reputable student loan forgiveness and repayment assistance programs, none are going to wipe away your debt overnight.
The sooner you can forget about loopholes and focus on realistic solutions, the sooner you can begin to make productive decisions about your 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 prevent you from paying back your debt, not to mention have detrimental effects on your mental health.
Depression often goes hand in hand with apathy, too. This duo can make even the simplest tasks seem overwhelming. It’s hard to get ahead when you just stop caring.
Student loan borrowers may be worried about how they will pay back their debt, how their loans affect their future goals, and about their current reality. It can feel totally overwhelming to manage the day-to-day expenses of life on top of hefty debt payments.
After processing an array of emotions, borrowers might come to terms with their student loan debt. They accept the fact that it won’t magically go away. In this phase of acceptance, borrowers look for a plan of action and learn to deal with their student loans rather than deny them.
While student loans can cause significant mental and emotional distress, there are ways to make your situation better. Your first step is taking account of your debt.
Make a list of your balances and interest rates, as well as your payments and due dates for each loan. Use student loan calculators to understand your repayment plans or to choose new ones.
Income-driven repayment plans, for instance, can make federal student loans more manageable if you’re working with a limited income. You might also consider the debt snowball or debt avalanche strategies so you can figure out which debts to prioritize. And if you have decent credit (or a helpful cosigner), look into student loan refinancing as a way to lower your interest rate and restructure your debt.
While student loans affect our lives in very real ways, there is always a light at the end of the tunnel. But you might have to overcome some huge hurdles before you’re able to act.
To take control of your situation, start by empowering yourself with knowledge and learning about your repayment options. And remember that your student loans don’t define you.
Regardless of where you are in your financial journey, you can find ways to make your student loans more manageable. Eventually, you can rid yourself of your student debt once and for all.
Rebecca Safier contributed to this report.
Interested in refinancing student loans?Here are the top 6 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|1.99% – 6.65%1||Undergrad & Graduate|
|1.99% – 7.10%2||Undergrad & Graduate|
|2.99% – 6.44%3||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|1.99% – 6.43%4||Undergrad & Graduate|
|3.18% – 6.07%5||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of June 23, 2020. Information and rates are subject to change without notice.
2 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Splash Financial loans are available through arrangements with lending partners. Your loan application will be submitted to the lending partner and be evaluated at their sole discretion. For loans where a credit union is the lender, or a purchaser of the loan, in order to refinance your loans, you will need to become a credit union member.
The Splash Student Loan Refinance Program is not offered or endorsed by any college or university. Neither Splash Financial nor the lending partner are affiliated with or endorse any college or university listed on this website.
You should review the benefits of your federal student loan; it may offer specific benefits that a private refinance/consolidation loan may not offer. If you work in the public sector, are in the military or taking advantage of a federal department of relief program, such as income based repayment or public service forgiveness, you may not want to refinance, as these benefits do not transfer to private refinance/consolidation loans.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 1, 2020.
Fixed APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rate options range from 2.88% (without autopay) to 7.27% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Rates are subject to change without notice. Fixed rate options without an autopay discount consist of a range from 2.88% per year to 6.21% per year for a 5-year term, 3.40% per year to 6.25% per year for a 7-year term, 3.45% to 5.08% for a 8-year term, 3.89% per year to 6.65% per year for a 10-year term, 4.18% per year to 5.11% per year for a 12-year term, 4.20% per year to 7.05% per year for a 15-year term, or 4.51% per year to 7.27% per year for a 20-year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full (whether before or after default, and whether before or after the scheduled maturity date of the loan).
Variable APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Variable rate options range from 1.99% (with autopay) to 7.10% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Our lowest rate option is shown with a 0.25% autopay discount. Our highest rate option does not include an autopay discount. The variable rates are based on the Variable rate index, is based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 27, 2020, the one-month LIBOR rate is 0.43763%. The interest rate on a variable rate loan is comprised of an index and margin added together. The margin is a fixed amount (disclosed at the time of your loan application) added each month to the index to determine the next month’s variable rate. Variable rate options without an autopay discount consist of a range from 2.01% per year to 6.30% per year for a 5-year term, 4.00% per year to 6.35% per year for a 7-year term, 2.09% per year to 3.92% per year for a 8-year term, 4.25% per year to 6.40% per year for a 10-year term, 2.67% per year to 4.56% per year for a 12-year term, 3.44% per year to 6.65% per year for a 15-year term, 4.75% per year to 6.93% per year for a 20-year term, or 5.14% per year to 7.10% for a 25-year term, with no origination fees. APR is subject to increase after consummation. Variable interest rates will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. The maximum variable rate may be between 9.00% and 16.00%, depending on loan term. The floor rate may be between 0.54% and 4.21%, depending on loan term. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
3 Important Disclosures for SoFi.
4 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 3.19% APR (with Auto Pay) to 6.43% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 6.43% 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 June 15, 2020, 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 6/15/2020. 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 protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 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.
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 0.19% effective June 10, 2020.