Student Loan Debt and Mental HealthMay 13, 2022
Student loans are more than a financial burden—they can also impact your mental health.
In fact, a 2021 study from Student Loan Planner found that 1 in 14 of high-debt borrowers had suicidal ideation due to student loan debt.
If you are struggling with student debt and mental health issues, there are strategies and resources available that could give you some relief.
How Student Debt Affects Mental Health
While it’s common to talk about the financial impact of student loans, talking about the effect on mental health is less prevalent. However, studies have shown that education debt can lead to an increased risk of anxiety and depression.
In a recent study by Givling, 63% of college students said they regretted taking out loans. Worse, it also caused them to put off major life goals. Without their debt, they said they would buy a home or start a business.
How do student loans affect mental health? There are multiple ways:
- Increased Stress: If money is tight and you’re worried about affording your bills, you likely have higher levels of stress. You may experience physical indicators like chest pain, high blood pressure, or headaches.
- Loss of Sleep: Stress and anxiety over your debt can cause you to lay awake thinking about your loans. Lack of sleep can lead to mood issues, poor memory, and decreased energy and productivity.
- Unhealthy Coping Mechanisms: If you are stressed, anxious, or depressed, it may be tempting to turn to coping mechanisms like drinking or smoking to cope. But these habits can cause physical health issues and even worsen your mental health.
Those factors can lead to feelings of shame, guilt, and hopelessness, worsening your mental health. Over time, worrying about your student loans can also hurt your physical health. A new study published in the American Journal of Preventive Medicine found that those with student loan debt were more likely to develop cardiovascular diseases.
5 Ways to Reduce Anxiety About Student Loans
Now that you know the link between student loans and mental health, you can take steps to manage your debt and improve your health:
1. Find Out What Your Situation Is
When you are overwhelmed by student loan debt, it’s tempting to try and forget about it. But ignoring your loans won’t make them go away; it only makes things worse.
The first step in managing your loans — and reducing your anxiety — is to figure out where you stand in terms of what you owe and the rates on your loans.
If you aren’t sure how much you owe or who your loan servicers are, that’s a common problem. To find out, use the following:
- Credit Report: Your credit report lists all of the credit accounts under your name, including federal and private student loans. You can look up your credit report for free at AnnualCreditReport.com. It will show what loans you have, what company is managing them, and what you owe.
- National Student Loan Data System (NSLDS): If you have your Federal Student Aid ID, you can log into the NSLDS to find out what loans you have and how much you owe.
- Federal Student Aid Information Center: If you believe you have outstanding federal loans, but aren’t sure who your loan servicer is, the Federal Student Aid Information Center can help you. You can contact the Information Center by phone or email.
2. Research Possible Options
Once you know how much you owe, the interest rates on your loans, and your minimum payment amounts, you can come up with a plan to repay your debt. Depending on the loans you have and your career path, you may be eligible for one or more of the following options:
Alternative Payment Plans
If your payments are too high and you can’t afford them on your current income, contact your loan servicer right away. You may qualify for an alternative payment plan that reduces your monthly payment amount.
With federal loans, you could be eligible for an income-driven repayment (IDR plan) that extends your repayment term and limits your payments to a percentage of your discretionary income.
With private loans, you may be able to postpone payments or temporarily reduce your payments. Policies vary by lender, so contact your loan servicer’s customer support team as soon as you first have trouble making payments.
If you are going back to school, are in the military and getting deployed, or have a financial emergency, contact your loan servicer to request forbearance or deferment.
With forbearances and deferments, the loan servicer pauses your loan payments — often for months at a time.
Federal loan forbearance and deferment programs are more prevalent and longer in duration, but many private student loan lenders offer forbearance and deferment programs too. For example, if you have a medical emergency or financial troubles, ELFI offers up to 12 months of forbearance.
If you have federal student loans, you may be eligible for one of the following forgiveness programs:
- Public Service Loan Forgiveness (PSLF): Under the rules of PSLF, you can qualify for loan forgiveness after making 120 monthly payments while working for a qualifying non-profit organization or government agency full-time for at least 10 years.
- Teacher Loan Forgiveness: Teachers that teach for five full, consecutive academic years in qualifying low-income schools or educational service agencies can get up to $17,500 in loan forgiveness.
Employer Loan Repayment Assistance
A growing number of employers are helping their employees pay off their education debt. Some companies will match your monthly payments — up to a monthly maximum — helping you pay off your debt faster.
3. Ask for Help
If you don’t know where to start with managing your loans, get help. Debt counselors with non-profit credit counseling agencies can work with you to evaluate your situation, develop a budget, and come up with a debt repayment plan that matches your goals.
You can find non-profit credit counseling agencies by visiting NFCC.org or by searching through the U.S. Department of Justice’s list of approved credit counseling agencies.
4. Consider Student Loan Refinancing
If you have high-interest debt — particularly private student loans that are ineligible for federal loan benefits — student loan refinancing could provide some much-needed assistance. You could qualify for a lower interest rate or change your loan term to reduce your monthly payments.
5. Prioritize Your Mental Health
While effectively managing your student loans can help your mental health, it’s not a magic cure-all. It’s still a good idea to address your mental health with trained professionals.
- Talk to a therapist: Talk therapy is an excellent way to learn healthy techniques for handling stress and anxiety and combating intrusive thoughts. You can search for a therapist near you via Psychology Today.
- Consider teletherapy: If you don’t want to visit a therapist in person, another option is teletherapy. You can use services like TalkSpace or BetterHelp to meet with a therapist virtually.
- Join a support group: There may be free or low-cost support groups in your area for people dealing with mental illness. You can find a local support group through the National Alliance on Mental Illness (NAMI).
- Reach out: If you can’t afford therapy or are having trouble finding a therapist or support group, contact your local NAMI or Mental Health America chapter to find out what resources are available.
Student debt and mental health can be a complex problem. If you are feeling depressed or stressed about your debt, know that you’re not alone. There are tools, resources, and help available to make managing your debt easier.
If you’re in crisis, help and support is available 24/7. Call the National Suicide Prevention Helpline at 800-273-8255 or text the Crisis Text Line (HELLO to 741741). All calls and texts are completely confidential, and counselors are available to provide emotional support around the clock.