With student loan debt at a higher level than ever, it’s unfortunate, though not surprising, that many Americans are suffering from financial anxiety.
According to a 2017 study by Northwestern Mutual, nearly one-quarter of millennials say financial anxiety has made them feel physically ill on a weekly or monthly basis — and 18% say it’s made them feel depressed.
It probably doesn’t help matters that money remains a taboo subject, one we all deal with but rarely talk about. To break down the taboo — and show that you’re not alone in worrying about finances — we spoke with student loan borrowers about their money fears.
Here’s what’s causing them the most stress, along with the steps they’re taking to overcome these challenges and come out on top.
1. Loan forgiveness might never pan out
When J.R. Duren, personal finance blogger and senior editor at consumer review site HighYa.com, put his student loans on an Income-Based Repayment plan, his reasons were two-fold: He wanted to lower monthly payments and earn loan forgiveness at the end of his repayment term. But after an unsettling conversation with his loan servicer, Duren worries that that loan forgiveness might never come.
“One of my biggest fears regarding my student loans is whether or not my IBR balance will be forgiven at the end of my … repayment term,” said Duren. “A conversation with my loan servicer made that way more murky than it should have been.”
Duren made several calls but was unable to get a clear answer to his questions.
“The servicer told me this was something the Department of Education does,” he said. “I called the Department of Education, and they said they didn’t know what I was talking about, and that I should call my servicer. This scares me.”
Since Income-Based Repayment was introduced in 2007, the first borrowers won’t become eligible for forgiveness until 2027. Duren is afraid that when the time comes, the program’s promise of forgiveness could go unfulfilled.
This fear also likely resonates with borrowers pursuing Public Service Loan Forgiveness, a program that has only granted forgiveness to a few of its applicants so far.
But while there’s no guarantee these programs will stick around forever, they could still be worth pursuing. Just make sure you’re filling out the right paperwork from year to year so you don’t get to the end of the road, only to find out you’re ineligible due to a technicality.
2. Debt could drag down my quality of life
As a money blogger at the financial website Millionaire Mob, Kyle Kroeger is familiar with the ins and outs of personal finance. But he’s had his own fiscal challenges, including more than $60,000 in student loans.
“The main stresses I have with personal finance is the limitations and burden that debt can have on your lifestyle and quality of life,” said Kroeger. “There’s a component of guilt to spending your money on things you enjoy when you are in debt or haven’t properly budgeted.”
Even if you carefully follow a budget, it’s common to feel guilty on non-essential expenses if you owe student loans or credit card debt. This feeling of guilt can take over if you don’t think carefully about how to prioritize your spending.
For Kroeger, it was important to get out from under the dark cloud of debt as soon as possible.
“I developed a sense of urgency with my debt repayment strategy,” he said. “I committed myself to eliminating debt as soon as possible.”
Kroeger started by taking inventory of his debts and coming up with a step-by-step plan for which ones to tackle first. Then he made moves to decrease his spending and increase his income so he could make extra payments on his loans.
“It’s important to have a detailed plan to follow,” said Kroeger. “This will help you stay motivated when you reach your goals and remove guilt when you want to purchase something you’d really be happy having.”
3. My debt will never go away
Even if you celebrate small financial wins, it can be tough to stay motivated when it feels like there’s no light at the end of the tunnel. Student loan borrower and co-founder of the budget-focused blog Budgeting Couple, Evan Sutherland, says he feels the most anxiety around his student loans when he thinks about how long they’ll be in his life.
“When it’s clear that you won’t pay off your debt for another 15 years, and that you’ll easily spend more than $10k in interest, anxiety is imminent,” said Sutherland. “Debt feels like a money-sucking black hole has opened at the center of your checking account.”
But he’s able to control his anxiety by shifting his mindset. Instead of stressing about the total costs of his loan, Sutherland said, it’s easier to take things one month at a time.
“Debt’s not nearly this scary when you look at it in the right light,” he said. “In reality, debt is nothing more than a swarm of small, annoying pests, each one demanding a little money from you every month.”
For Sutherland, planning and following a budget makes him feel more in control of his financial situation — and less overwhelmed as a result.
“Keep your focus on what’s in your control,” he advised. “Take it one bill at a time, increase your monthly payments as you feel comfortable, and you will become debt-free.”
4. Student debt will undermine my career goals
As an entrepreneur, Jason Patel’s main financial fear is that his debt will stand in the way of his career aspirations.
“I worry that student loans will weigh me down to the point that I won’t be able to accomplish the things I’ve set my heart on pursuing,” said Patel. “Many of these accomplishments are intertwined with entrepreneurship, and, as we all know, entrepreneurship costs money.”
But Patel decided not to wait until his student debt was gone to start a business. Since graduating from George Washington University, he founded Transizion, a college- and career-prep company.
“Dealing with paying myself enough to pay my loans and managing business cash flow is a balancing act,” said Patel. “You need to balance paying your bills versus growing your beloved business.”
For Patel, the secret to finding this balance boils down to self-discipline.
“I formed a plan and set spending limits on myself,” Patel said. “Anytime I feel stressed, I make sure to trust my plan.”
He also focuses on the present rather than stressing about how long his loans will be in his life.
“[I] refuse to focus too much on how long my loan payments will take to pay off,” he said. “The time will come when I finally pay them off, so there’s no point of getting myself upset. I need to trust the process.”
As long as he keeps up with minimum payments, Patel is confident he’ll be debt-free eventually.
“Looking far too deeply into the past or future will waste the precious time we have in the present,” said Patel. “The loans will be gone one day — I know that much.”
5. Disagreements over money could damage my relationship
Through his work as an accredited financial counselor with the nonprofit Money Fit, Todd Christensen has helped people with their financial challenges for over 15 years. He’s seen many clients deal with the same concerns as he himself has over the years.
“Even as a financial educator and counselor, I have many of the same fears as most people,” said Christensen. One common concern is how people in relationships can avoid arguing over money.
“We all fear damage to important relationships,” said Christensen. “I recommend to all my adult learners to sit down once a week with their spouse for 10 minutes to review their shared financial goals (not just retirement, but vacations, replacement of important items, college savings, etc.).”
During that conversation, he said, the couple should also “identify current cash balances, discuss upcoming payments and purchases and who will make them, and then return to the goals to see how to save more over the next week to accelerate them.”
This “financial huddle” will make sure you and your partner are on the same page financially and could help avoid potential conflict. Christensen also says to remember that everyone has financial regrets, but it’s important not to beat yourself up over choices you made in the past.
“We all make financial mistakes,” he said. “I share many of my bad choices with my workshop participants so they understand it’s not about where we have been, but where we are headed.”
You’re not alone in worrying about money
Even if your money concerns aren’t going to go away overnight, it can help to share your issues with others. By realizing you’re not alone in the struggles of paying off debt, you can find much-needed support from friends, family, or an online community.
Plus, you can learn valuable advice for managing anxiety and overcoming financial obstacles, no matter how insurmountable they might seem. That said, if your money stress feels paralyzing, it might be time to seek professional assistance from a therapist or counselor.
Even though it might seem indirect, prioritizing your mental and emotional health could be the best first step you can make toward financial wellness.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
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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 3.36% APR (with Auto Pay) to 7.82% APR (with Auto Pay). Variable rate loan rates range from 2.41% APR (with Auto Pay) to 6.99% 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 April 17, 2019, 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 04/17/2019. 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 firstname.lastname@example.org, or call 888-601-2801 for more information on our student 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 SoFi.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed 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.
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.
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.
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 2.45% effective May 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.41% – 6.99%1||Undergrad & Graduate|
|2.41% – 7.89%2||Undergrad & Graduate|
|2.43% – 6.65%3||Undergrad & Graduate|
|2.38% – 6.81%4||Undergrad & Graduate|
|2.41% – 8.19%5||Undergrad & Graduate|
|2.60% – 9.60%6||Undergrad & Graduate|