The idea of being stressed about student loans has become almost too cliché to have meaning anymore. When we talk about feeling stressed, those around us might simply think, “Don’t we all?”
But the toll of this stress is serious. In a survey of more than 1,000 student loan borrowers, we dug deep on the psychological effects of debt — specifically, student loan debt. More than 61 percent of respondents said they fear their student loan debt worries are spiraling out of control — and more than 70 percent reported suffering from headaches due to the stress of it.
From insomnia to physical symptoms of anxiety to social isolation, student loan-induced stress is threatening to take over the lives of borrowers. Here’s what to do if this feels all too familiar to you.
3 major takeaways about the psychological effects of student loan debt
The psychological effects of debt are just starting to enter the dialogue on personal finance. Typically seen as just a numbers game, it’s finally becoming apparent that money troubles go far deeper than what can be seen on paper, an app, or an Excel spreadsheet.
There’s often a steep emotional hurdle to climb to reach financial goals. Unfortunately, that hurdle might be even steeper for many student loan borrowers. Here are just a few of the results uncovered in our survey on the psychological effects of debt.
People are losing sleep over their student loan debt
First of all, if you ever lose sleep due to stress over paying your student loans, you’re not alone. More than half of the respondents in this survey reported suffering from sleepless nights due to debt — 64.5 percent to be specific.
One respondent talked about the anxiety spiral that can cause this:
“When you think you have a healthy savings, you realize just how much you owe and the interest you’ve been paying on [student loan debt]. It stresses me out and whirls me into anxiety, and I just crawl into my shell.”
Insomnia isn’t just frustrating, it can damage your health. According to the Mayo Clinic, insomnia can lead to a lower quality of life, including poor job performance, increased risk of certain diseases, and even mental health disorders. And this brings us to the next point:
People are experiencing physical symptoms from their stress
More than 67 percent of respondents reported having physical symptoms of anxiety due to the stress from their student loan debt.
As if losing sleep wasn’t bad enough, these symptoms include headaches (71.5 percent), muscle tension (55.9 percent), and upset stomach (50 percent). Other symptoms included rapid heartbeat, tremors, fatigue, and shortness of breath.
And when we asked respondents about how they’d describe their feelings about debt, this is what they had to say:
What’s worse, taking steps to improve your health is harder to do when you feel overwhelmed. One respondent spoke to the paralyzing effect of debt:
“I lose motivation because I feel stuck in a rut. I lose motivation to cook, to eat, to leave the house, and I feel alone in my feelings.”
And it’s feeling alone that causes some to choose to be alone.
Some isolate themselves because of their debt
Depression and anxiety can lead to self-imposed isolation. More than 74 percent of respondents reported shutting other people out of their lives often due to their student loan debt stress. In their own words:
“I avoid doing things with friends and family because I don’t want them to know how broke I am.”
“It’s strained my relationship with my family because they don’t believe I should have gone to college. My debt just makes them feel right.”
“I’m constantly working all of the time to earn money to pay the debt, and I don’t get to spend time with family and friends.”
But why do they turn to isolation?
Sometimes isolation is easier than being vulnerable about what we’re going through. Below are various feelings the respondents associated with having debt.
None of these make it easy to talk about what you’re going through — or have hope that someone will understand. However, there is help available.
What to do about student debt stress
Financial stress can create a vicious cycle. Debt causes fear. Fear causes loss of sleep and poor job performance, which in turn creates worry about job security and paying the bills, causing the cycle to repeat.
Breaking this cycle of financial anxiety is crucial.
The sooner you get help, the sooner you can release yourself from anxiety. And know that you deserve help — because having debt doesn’t mean you should have to suffer alone. Here are ways to do it.
Take the first small step
Psychologist Dr. Susan Chanderbhan explains the best thing you can do is to take one small step:
“The more you avoid facing it, the bigger it gets. And in taking that first step to face it, we often find that it’s not as bad as we feared. Taking that first step helps us feel more in charge of our lives, more in control.”
And if you need help in facing your anxiety over student debt, Dr. Chanderbhan advises using the National Alliance on Mental Illness (NAMI) to find affordable care.
Factor your loans into your life plan
Clinical psychologist Dr. Nancy Irwin speaks to the power you can achieve when you do take control, whether taking control involves creating a new student loan payoff plan, finding a therapist to talk to, or a combination of these and other moves. According to her, this can change your mindset and your results:
“Assertive, powerful people factor student loan debt into their overall life plan, feeling grateful that they were able to get an education and embark on a career that is meaningful. Give yourself a break, and remind yourself that you chose to go to school and get a higher education for some important reasons. Review them regularly and focus on your mission.”
Some survey respondents might already be doing this. Nearly 40 percent said that their debt gives them a new awareness of the consequences of debt, and more than 18 percent stated that they now feel more confident about money. Sometimes a simple understanding of the challenges ahead and can change everything.
Utilize financial tools
Once you’ve gotten a handle on some of the psychological effects of debt, here are a few steps to take to regain financial control:
- If you’re making payments regularly and in a stable career, consider refinancing your student loans at a lower interest rate to lower your payments or shorten your repayment period.
- If you’re struggling to make your payments and have federal loans, use an income-driven repayment plan to decrease your payments and eventually qualify for forgiveness.
- Whether your loans are federal or private, you might be able to use deferment or forbearance to pause your payments temporarily.
How to find light at the end of the tunnel
The road ahead might seem long, but you can make sure your destination grows nearer with each passing day. Author and psychotherapist Dr. Will Meyerhofer has an important reminder for us all:
“Stay true to yourself and try to live a life that reflects your authentic self, despite the loans.”
Find a therapist, financial planner, or a financial therapist. Create a debt payoff strategy. And focus on creating the life you want to live today. You might not get immediate freedom from your debt, but knowing your goals and feeling empowered to go after them can put you in the driver’s seat. And what’s more freedom-inspiring than being in control of your own life?
Student Loan Hero conducted this survey via Survey Monkey on August 8, 2017, and collected responses from 1,007 student loan borrowers living in the United States. The screening question was, “Do you have student loans?” for which the target answer was “yes.”
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|Lender||Variable APR||Eligible Degrees|
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|2.05% – 5.25%3||Undergrad & Graduate|
|1.74% – 7.99%4||Undergrad & Graduate|
|1.74% – 7.99%5||Undergrad & Graduate|
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1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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 June 1, 2022.
2 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 April 29, 2021. Information and rates are subject to change without notice.
3 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.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay.
4 Important Disclosures for Navient.
5 Important Disclosures for SoFi.
Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR 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. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
6 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.24% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 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%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. Let us know if you have any questions and feel free to reach out directly to our team.
7 Important Disclosures for Purefy.
Purefy Student Loan Refinancing Rate and Terms Disclosure: Annual Percentage Rates (APR) ranges and examples are based on information provided to Purefy by lenders participating in Purefy’s rate comparison platform. For student loan refinancing, the participating lenders offer fixed rates ranging from 2.73% – 7.99% APR, and variable rates ranging from 1.74% – 7.99% APR. The maximum variable rate is 25.00%. Your interest rate will be based on the lender’s requirements. In most cases, lenders determine the interest rates based on your credit score, degree type and other credit and financial criteria. Only borrowers with excellent credit and meeting other lender criteria will qualify for the lowest rate available. Rates and terms are subject to change at any time without notice. Terms and conditions apply.
8 Important Disclosures for Citizens.
Education Refinance Loan Rate Disclosure: Variable interest rates range from 1.99%-8.38% (1.99%-8.38% APR). Fixed interest rates range from 2.99%-8.63% (2.99%-8.63% APR).
IS Variable Rate Disclosure: Variable Rates advertised are 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 December 1, 2021, the one-month LIBOR rate is 0.09%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. Your final variable rate may be based upon the 30-day average SOFR index, as published by the Federal Reserve Bank of New York. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
ERL Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of May 1, 2022, the 30-day average SOFR index is 0.29%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates are only available for the most creditworthy applicants, require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
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. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, 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. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website 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.