10 Reasons Your Student Loans Are Causing Anxiety

Student loan debt is not just a financial issue; it’s a mental health issue. Our mental health survey found undeniable evidence that student loan borrowers’ mental health is affected by their debt.

One staggering statistic we found is that 90% of borrowers felt anxiety about their student loan debt. So many borrowers are overcome with anxiety because of their student loan debt, but it’s not always clear why that’s the case.

Here are the top 10 reasons you might be feeling student loan anxiety.

1. Monthly payments

On a basic level, the student loan payments themselves are causing borrowers anxiety. In our survey, 12% of borrowers said their monthly payments were the top cause of their mental health issues. Monthly student loan payments on top of everyday expenses are tough to manage, which causes anxiety.

2. Interest keeps on growing

Trying to get out of student loan debt is difficult because the interest keeps increasing your total debt. In fact, student loan interest accrues daily.

For some income-driven repayment plans, the monthly payments don’t even cover the cost of interest, making it nearly impossible to get ahead. Our survey found that 13% of respondents said interest charges were the top cause of their mental health issues.

One borrower expressed, “Student loan interest, both federal and private, needs [to be] capped and reduced. It is ridiculous that someone can pay several times their original degree cost and still have a balance due.” Another borrower said they’d be happy if their interest disappeared and they could just pay back what they originally borrowed.

3. Burnout

Our survey found that burnout is the top factor (43%) that contributes to mental health issues. Many professionals, such as physicians, deal with burnout.

According to the Mayo Clinic, “Job burnout is a special type of work-related stress — a state of physical or emotional exhaustion that also involves a sense of reduced accomplishment and loss of personal identity.”

Feeling burnout with your job and having the added stress of loan payments taking a good chunk of your paycheck can lead to feelings of student loan anxiety.

 4. Distrust of the government

A common theme that came up in our mental health survey was a feeling of distrust of the government. One respondent noted that they would feel better if they thought the government had their back, saying they’d like, “Feeling supported by the government. This is unreasonable though, as it is the government who put me in this position by enforcing extremely high interest rates and working with incompetent agencies, such as Fedloan.”

Many of our respondents feel like student loan forgiveness programs can change at any time and that the government, in general, doesn’t support student loan borrowers.

5. Low pay

Another reason student loans cause anxiety is due to low pay among borrowers. Some professions require special education and licensing, but don’t offer the pay to actually pay the loans back. One example is in physical therapy; those interested in pursuing a career in this field now need a Doctor of Physical Therapy (D.P.T.) degree in order to work.

One Marriage and Family Therapist (MFT) noted that the pay is low compared to the debt taken out. Many other professions that are in the service of others don’t offer great pay. Low compensation makes paying back student loan debt even more difficult, which can add to feelings of anxiety.

6. Feeling stuck in a job

Twelve percent of survey respondents said the top cause of their mental health issues was feeling like they were stuck in a job because of their debt.

When you’re saddled with student loan payments each month, you need a paycheck to feed the beast, so to speak. It can make you feel like you have to stay at a job you don’t like and like you’re out of options. If you’re working toward Public Service Loan Forgiveness (PSLF), that’s a minimum of 10 years of service.

7. Lack of opportunities

When you take out student loans, it’s typically to pursue a specific career path. You might have been told that if you work hard, go to school and get good grades, you’ll be set.

Many borrowers feel that after graduation, there’s a lack of opportunities. The jobs they were promised don’t exist. A livable wage isn’t as common as they thought. The pay and promotions don’t match their expectations.

One borrower noted, “The work is so highly competitive and underpaid for the amount of skills and education it requires.” They took out loans thinking one thing, but the reality is another, which causes anxiety around student loan debt.

8. Unclear information

Student loan borrowers must contend with loan servicers when paying back their student loan debt. Loan servicers act as middlemen to manage student loan payments. In theory, loan servicers should be an advocate for borrowers, helping them get on the right plan and empowering them with options.

However, there have been complaints about loan servicers’ lack of clear information. One respondent noted that there’s a lack of straightforward information about the repayment plans and forgiveness options. All of this confusion can lead to misinformation and being on a plan that isn’t the best choice financially for the borrower.

 9. No support

In general, student loan borrowers feel a lack of support. They don’t feel supported by their loan servicers, their jobs or the government. Essentially, this can cause borrowers to feel isolated about their student loan debt. This lack of support can cause student loan anxiety. And in order to try and get support, there are barriers.

Our survey found that 27% of respondents don’t get help because of a lack of time. Another 11% cited not knowing about resources to find help, and 6% state that stigma is holding them back.

10. Unsure about student loan forgiveness

Many borrowers are looking to get their student loans forgiven under PSLF or income-driven repayment. PSLF has been causing student loan stress among borrowers, as only 1% of applicants have been approved for loan forgiveness.

There isn’t a clear-cut process for loan forgiveness with income-driven repayment, which causes borrowers to question whether they’re on the right track.

Also, some borrowers worry that student loan forgiveness might disappear. For example, President Trump has proposed repealing PSLF, which could hurt future borrowers. And as the upcoming 2020 election approaches, student loan legislation remains a hot button issue.

What you can do

Our mental health survey shows there are a variety of factors that contribute to student loan anxiety. It can be tough to manage, but you’re absolutely not alone.

To handle student loan anxiety, identify what is the cause of your anxiety. Is it the payments? The interest? The confusion about plans? Once you identify the issue, you can work toward a solution.

If your payments are a cause of anxiety and stress, consider going on an income-driven repayment plan. If it’s the interest, refinancing might be an option to consider. When possible, focus on lowering the big three expenses — rent, food and transportation.

You don’t have to go it alone, and we’re here to help. If you want some guidance to create a plan of action, get in touch. Student Loan Planner helps borrowers get a plan that works for their unique situations.

Article was originally written by Melanie Lockert on Student Loan Planner. Melanie Lockert is the founder of the blog and author of the book, Dear Debt. Through her blog, she chronicled her journey out of $81,000 in student loan debt. Her work has appeared on Business Insider, Time, Huffington Post and more. She is also the co-founder of the Lola Retreat, which helps bold women face their fears, own their dreams and figure out a plan to be in control of their finances.