How To Handle Student Loan Anxiety

Take the necessary steps to understand your student loan debt and how to get a handle on your repayment journey.
How To Handle Student Loan Anxiety
Student debt has been linked to depression and anxiety. Image/Shutterstock

Student loans can help make your educational dreams a reality. But this financial choice can come with a crushing dose of student loan anxiety. A mental health survey conducted by Student Loan Planner found that 90% of the borrowers felt some anxiety about their student loans.

Although it can be challenging, you can take steps to handle the anxiety that surrounds your student loans. Here’s how student loan anxiety can surface and a few solutions that might help your situation.

Why student loans make us anxious

If you have student loans, then you might understand how student loan repayment can feel overwhelming. Here are a few major factors that can contribute to anxious feelings about student loan debt.

1. Large monthly payments that feel like an “income tax”

When you start making monthly payments on your student loans, the burden on your budget can feel heavy. Even if you switch your federal student loans to an income-driven repayment plan (IDR), the monthly payment can still put a strain on your resources.

Depending on the IDR plan you choose, you’ll pay between 10% to 20% of your discretionary income. Anyone can feel the crunch of this payment in their monthly budget. Beyond the monthly payment, you’ll also need to save for the “tax bomb”. This is the amount you’ll pay in taxes on any portion of your student loan balance that is forgiven under an IDR plan.

2. Feeling stuck in a job you don’t love

A surefire way to feel less than excited about your life is to feel stuck in a job you don’t love. But if you have student loans, you might feel forced to stick to a higher-paying job that doesn’t make you happy just to keep up with student loan payments.

Although “sticking it out” at a job that doesn’t bring joy is an admirable choice, it can be soul-crushing in the long term.

3. Burnout

If you’re struggling to keep up with your student loan payments, getting out from under your debt can feel like a never-ending cycle. Finding the fire to hustle only to make a small dent in your student loans can lead to burnout, easily.

How to handle student loan anxiety

If you’re not sure how to get a handle on your student loan anxiety, here are a few tips.

#1 Talk about your student loans with family and friends

Talking about debt or financial details of any kind can feel like a taboo subject. But opening up with your family and friends about your student loan debt can help alleviate some of the anxiety — at the very least, it reinforces that you’re not alone in this struggle.

You might find strong support from your network to help you navigate stressful times. In other situations, you might find that one of your close friends is in a similar situation. Ultimately, having an open conversation about what’s weighing on your mind can be helpful.

Beyond talking to family and friends, another option is speaking to a therapist. With a trained professional, you can talk through the emotions that come up when it comes to money and student loan debt.

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#2 Create a repayment plan

A great way to help you feel more comfortable about your student loans is by creating a manageable repayment plan.

This includes reaching out to your lender about alternative repayment options, like an IDR plan for federal student loans, or discussing deferment options with a private lender if you’re facing hardship.

With a clear path to a finish line, you may feel less anxiety around your student loans.

#3 Consider refinancing

A final way to help you manage your student loan anxiety is by considering your student loan refinancing options. A student loan refinance pays off your original federal or private student loans in full. Then, the refinancing lender creates a new private, refinance student loan that you’ll repay.

With the right refinancing solution, you can potentially save hundreds each month on your student loan repayments thanks to a lower interest rate. Student loan refinancing can help to lower your overall debt burden.

But there are some caveats to refinancing federal student loans. If you have federal loans, refinancing eliminates any future help from the federal government. This includes flexible income-driven repayment options and loan forgiveness. Make sure to take this drawback into consideration before moving forward with any refinancing options.

The bottom line

Student loans can create a stressful financial situation for any borrower. But with these strategies, managing student loan anxiety in a healthy way it’s possible.

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Dr. Keith Kantor

Dr. Kantor has been an advocate of natural food and healthy living for 30 years. He is also on the Board of Directors for NAMI.org in G

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