Debt and Mental Health: Are Student Loans Making You Depressed?

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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).

1. Denial

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 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.

2. Anger

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.

3. Bargaining

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.

4. Depression

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.

5. Acceptance

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!
LenderVariable APREligible Degrees 
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Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. 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.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student Loan RefinanceFixed rates from 3.999% APR to 7.804% APR (with AutoPay). Variable rates from 2.480% APR to 7.524% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.480% APR assumes current 1 month LIBOR rate of 2.07% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (

3 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, 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 August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.72%-8.17% (2.72%-8.17% APR) and 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 cosigner. Fixed interest rates range from 3.50%-8.69% (3.50% – 8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. 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. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit We also have several resources available to help the borrower make a decision at, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Average savings based on 18,113 actual customers who refinanced their federal and private student loans through our Education Refinance Loan between January 1, 2017 and December 31, 2017. The calculation is derived by averaging the monthly savings of Education Refinance Loan customers whose payments decreased after refinancing, which is calculated by taking the monthly student loan payments prior to refinancing minus the monthly student loan payments after refinancing. The borrower’s savings might vary based on the interest rates, balances and remaining repayment term of the loans they are seeking to refinance. The borrower’s overall repayment amount may be higher than the loans they are refinancing even if their monthly payments are lower.
2.57% – 5.87%Undergrad
& Graduate
Visit Earnest
2.80% – 6.38%1Undergrad
& Graduate
Visit Laurel Road
2.48% – 7.52%2Undergrad
& Graduate
Visit SoFi
2.47% – 7.99%Undergrad
& Graduate
Visit Lendkey
2.57% – 6.65%3Undergrad
& Graduate
Visit CommonBond
2.72% – 8.17%4Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.