How Student Loans Affect Your Health — and What You Can Do About It

student loan debt health

When graduates leave school, they often walk away with crippling student loan debt. But those student loans can affect more than just finances.

A recent study shows that student loan debt can literally make you ill. It can have long-lasting repercussions, even affecting your productivity and performance at work.

Student loans and health

The American Student Assistance organization, a non-profit focused on college affordability, released a study on the connection between student loans and health. The group surveyed over 500 students and 450 human resources professionals.

The results were pretty bleak: 40 percent of respondents reported that worrying about student loans has impacted their health.

But it’s easy to see why. When you’re stressed about student loan debt, it can impact your sleep, eating habits, and daily routine. If you feel overwhelmed when it comes to your debt, it can cause depression. That can have serious ramifications on your body.

Even worse, if you’re worried about making ends meet you might put off going to a doctor. You might opt for the lowest tier of health insurance or even skip a policy altogether. That can leave you unprepared to handle medical issues that come up.

Student loans can cause your performance at work to slip, too. If you’re sleep deprived because you were up all night worrying about your debt, you’re more prone to sloppy work and simple mistakes.

Impact on the workplace

“Young workers feel highly stressed as a result of … student debt and that … impacts their health and productivity in the workplace,” said Kevin Fudge, director of consumer advocacy and ombudsman at ASA in a press release.

Because the impact on young workers is so significant, the ASA says this is a major issue not just for graduates, but for employers as well.

“Employers should realize that in order to retain the brightest young talent … they need to provide concrete and straightforward solutions to help alleviate this burden,” said Fudge.

What you can do

If your student loans are impacting your daily life, it’s important to take control of your debt and develop a plan. Even if you’re struggling to afford your payments, there are options available that can make your loans more manageable.

Sign up for an income-driven repayment plan

If you have federal student loans, you might be eligible for an income-driven repayment (IDR) plan. There are four options:

  • Income-based repayment
  • Income-contingent repayment
  • Pay As Your Earn
  • Revised Pay As You Earn

While the specifics vary for each plan, the concept of IDR plans is the same. Under IDR, the government caps your monthly payment at a percentage of your discretionary income and the repayment term is extended from 10 years to 20 to 25, depending on your situation. If you’re tight on cash, signing up for an IDR can significantly reduce your payments and give you more breathing room.

After 20 to 25 years, if you still have a loan balance, the government will discharge the remaining amount. An IDR plan can be a valuable tool if you have a high loan balance.

Refinance your student loans

If you have private loans or are otherwise not eligible for IDR, another option to consider is refinancing your debt. By refinancing, you take out a new loan for the amount of your current debt. The new loan will have a lower interest rate and repayment term, so you can choose a plan that works for you.

By reducing your interest rate or extending your repayment term, you can dramatically reduce your monthly payment. That can free up cash for your budget to help you afford everyday essentials, including health insurance premiums.

But if you’re eager to get rid of your student loans as soon as possible, refinancing allows more of your payment to go to the principal rather than interest. With a lower interest rate, you can pay off your loans faster and save hundreds or even thousands over time.

If you have federal loans, it’s important to know that refinancing your debt will cause you to lose certain federal protections, including access to income-driven repayment plans. But if your loans are making you sick, refinancing can be a smart way to accelerate your repayment and regain control over your debt.

Managing student loans

Carrying a large amount of debt can be stressful. More than just an annoyance, student loans can actually impact your health. If your student loan balance is harmful to you or your health, research your options to see if an income-driven repayment plan or refinancing is for you.

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