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?
Survey Methodology
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.”
Interested in refinancing student loans?
Here are the top 9 lenders of 2021!| Lender | Variable APR | Eligible Degrees | |
|---|---|---|---|
 | 1.88% – 6.15%1 | Undergrad & Graduate | |
 | 1.88% – 5.64%2 | Undergrad & Graduate | |
 | 2.50% – 6.85%3 | Undergrad & Graduate | |
 | 1.89% – 5.90%4 | Undergrad & Graduate | |
 | 1.99% – 6.59%5 | Undergrad & Graduate | |
 | 1.88% – 5.64%6 | Undergrad & Graduate | |
 | 1.90% – 5.25%7 | Undergrad & Graduate | |
 | 2.39% – 6.01% | Undergrad & Graduate | |
 | 2.13% – 5.25%8 | Undergrad & Graduate | |
| Check out the testimonials and our in-depth reviews! 1 Important Disclosures for Splash Financial. Splash Financial DisclosuresTerms 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, 2021. 2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest. Earnest DisclosuresInterest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.48% APR to 5.79% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.88% APR to 5.64% APR (excludes 0.25% Auto Pay discount). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 36% (the maximum allowable for these loans). Earnest variable interest rate student loan refinance 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 2.04% and 5.8% to the one month LIBOR. Earnest rate ranges are current as of 6/8/2021, and are subject to change based on market conditions. Auto Pay Discount Disclosure You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. Student Loan Refinancing Loan Cost Examples These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest. com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product. Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit earnest.com/licenses for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America. © 2021 Earnest LLC. All rights reserved. 3 Important Disclosures for CommonBond. CommonBond DisclosuresOffered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. 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 0.15% effective Jan 1, 2021 and may increase after consummation. 4 Important Disclosures for Laurel Road. Laurel Road DisclosuresAll 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. 5 Important Disclosures for SoFi. SoFi DisclosuresFixed rates from 2.49% APR to 6.94% APR (with autopay). Variable rates from 1.99% APR to 6.59% APR (with autopay). All variable rates are based on the 1-month LIBOR and may increase after consummation if LIBOR increases; see more at SoFi.com/legal/#1. If approved for a loan your rate will depend on a variety of factors such as your credit profile, your application and your selected loan terms. Your rate will be within the ranges of rates listed above. Lowest rates reserved for the most creditworthy borrowers. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org). Additional terms and conditions apply; see SoFi.com/eligibility for details. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. 6 Important Disclosures for Navient. 7 Important Disclosures for LendKey. LendKey DisclosuresRefinancing 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 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.75% Fixed APR with AutoPay. 8 Important Disclosures for PenFed. PenFed DisclosuresAnnual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. 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. |
|||
