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How Student Loan Debt Affects Your Mental Health

Ben Luthi
The Student Loan Crisis Is Worse Than You Think

Feeling stressed about money isn't uncommon, but for many people with student loans, the burden takes a toll physically and psychologically.

According to a Student Loan Hero survey of more than 1,000 student loan borrowers, respondents reported experiencing anxiety, insomnia, headaches, social isolation, and more as a result of their student loan debt.

How Student Loan Debt Stress Can Affect You

Starting your career with tens of thousands of dollars in student loan debt can make the goal of financial security seem unattainable. Among those who responded to the survey, 61% feared their worries over student debt were spiraling out of control.

Respondents also reported the following physical and psychological symptoms due to stress:

  • Social isolation (74%)
  • Headaches (72%)
  • Sleepless nights (65%)
  • Muscle tension (56%)
  • Apprehension or dread (55%)
  • Irritability (55%)
  • Restlessness (53%)
  • Depression (52%)
  • Tenseness (51%)
  • Nausea (50%)
  • Jumpiness (21%)

These debilitating effects can leave you feeling helpless about your student debt. What's more, they can permeate your life and leave you less productive at work, more isolated from your family and friends, and less happy in general.

If you've felt any of these effects of student loan debt, here are three tips on how to get back on track.

1. Get On a Better Repayment Plan

If your student loan payments are pushing you to your limits, you might be able to find relief through an income-driven repayment plan or by refinancing your loans.

Income-Driven Repayment

If you have federal student loans, the Department of Education offers four income-driven repayment plans that can help lower your monthly payments to 10% to 20% of your discretionary income.

These plans extend your repayment term to up to 25 years, so you might end up paying more in interest in the long run, but you'll get the relief you need now.

Keep in mind that private student loans don't qualify for these repayment plans. If you have private loans, contact your lender to see if it offers relief for financial hardship.

Refinancing

Whether you have federal or private student loans, you might be able to refinance them to get a lower interest rate, a lower monthly payment, or both.

Several student loan refinancing companies offer low variable- and fixed-interest rates. But even if you don't qualify for those rates, lenders also offer various repayment terms that can help you get more flexibility in determining your monthly payment.

For example, if you had $30,000 in student debt with a 6.00% APR and 10-year repayment term, your monthly payment would be $333. If you refinanced your loans with a 4.00% APR and the same repayment term, your payment would drop to $304. If you didn't manage to get a lower interest rate but extended your repayment term to 15 years, your payment would still drop to $253.

Again, extending your repayment term could mean you'll pay more interest over the life of the loan. But if your goal is to get relief now, it's a viable short-term solution. And you can always refinance again in the future.

2. Get the Rest of Your Finances in Order

Massive student loan debt can be daunting enough. But if the problem is compounded by other financial woes, focusing on your student loans alone might not be enough.

For example, if you have bad credit, review your credit report to see if there are any areas you can start working on immediately. Delinquent accounts can damage your credit score the longer you're late on payments. If you have any delinquent accounts, get them paid up to avoid worse consequences.

If things are really bad, consider working with a credit repair company to get the help you need and get back on track.

If you're having trouble with student loan payments, create a budget to see if there are areas where you could cut back so you can manage your payments more easily.

To get started, calculate your income and monthly expenses. Then set goals for your monthly spending to make sure you can set aside extra cash for your student loans. Consider using a budgeting app to make the process go more smoothly.

Lastly, take stock of your other debt. If you have high-interest credit card debt, consider consolidating the debt with a low-interest personal loan or 0% balance transfer card. With less of your monthly payment going to interest, you'll pay down your debt more quickly.

3. Seek Help if You Need It

If you're suffering from the negative psychological effects of student loan debt, don't rule out professional help. A financial therapist can help you put your student debt troubles into perspective and provide you with healthy ways to cope with your student debt and other financial issues.

The most important thing is that you have a plan. Using these tips can help you get started, but it's up to you to set goals and follow through.

As you take steps to address your student debt and the psychological issues that come with it, you can develop the confidence to gain more control over your money—and your life.