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%)
Sleepless nights (65%)
Muscle tension (56%)
Apprehension or dread (55%)
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.
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.
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.
Jana Lynch was 27 years old when she was formally diagnosed with depression. The illness wasn’t severe enough for her to start seeking regular treatment until eight years later, when a panic attack at work sparked a series of events that changed her career — and her finances — forever.
At the time, Lynch was working full-time for a social service agency. “Not only was my anxiety and depression through the roof, making it hard to get out of bed, concentrate on tasks, meet deadlines, communicate with coworkers, and remember meetings, but the nature of my job made it a dangerous environment for my mental health at the time,” she says.
Rather than resign outright, she decided to take a four-month leave on short-term disability. A break, she thought, might help. But when the time came to return to work, the same issues began to surface again. In the end, she chose her mental health over working full time.
“Looking back, it was a terrible choice because of the impact on my long-term personal finances,” she says. “But in the moment, it was the best decision for me and my family.”
Lynch’s story is not unique. In a 2004 study that followed workers over the course of six months, researchers found workers with depression dropped out of the workforce at a rate of 12 percent compared to only 2 percent of their peers.
While depression may force affected workers out of active employment at higher rates, it is also true that those who become unemployed are more likely to show signs of depression — three times more likely, according to a 2010 NIH study.
Thomas Richardson, a leading researcher at Solent NHS Trust, one of the largest community providers in the UK’s National Health System, notes that there is most definitely a correlation between unemployment and depression, but that causation is not as easy to pin down.
“In research such as this it’s always a case of chicken and egg: Which came first?” he says. “A lot of research is only at one time point, so it’s hard to say which came first.”
Some research shows losing your job impacts depression because it makes it hard to cope financially, but other studies suggest it has little impact.
“I think it probably works both ways and is a vicious cycle,” Richardson continues. “Someone becomes depressed, struggles at work, and loses their job. This then exacerbates their depression further.”
6 Strategies to Manage Depression and Work
Abigail Perry, author of Frugality for Depressives, had already been formally diagnosed with depression as a part of a bipolar disorder when unrelated chronic fatigue forced her out of traditional employment.
“I thought I’d be nothing but a burden for the rest of my life,” says Perry. “I wondered who would ever want someone who couldn’t pull her own weight financially, and I became suicidal. A lot of therapy and medication management doctor visits later, I finally started believing that I might have worth despite not being able to work.”
Those struggling with balancing their career and depression need not lose hope.
Richardson notes that many are able to develop coping strategies, allowing themselves to stay in the workplace. He’s developed six key strategies that his research has revealed to be helpful to workers with depression.
1. Intentionally look for work you enjoy.
“Try and do a job you enjoy or are interested in,” Richardson encourages. “If not possible, then try and focus on those bits of your job you do enjoy.”
Allyn Lewis, lifestyle blogger and storytelling strategist from Pittsburgh, Pa., has learned this technique through the course of building her business.
Diagnosed with a depression that was further fueled by her father’s suicide when she was a teen, Lewis never truly entered the traditional workforce, but has found self-employment to suit her disability.
Her motivating enjoyment comes from the community-based aspect of her business.
“Telling my story and talking openly about my anxiety, depression, and the loss of my dad is what keeps me active in my career,” says Lewis, 26. “That might sound strange, but when I keep my mental health journey to myself, it feels like it’s all about me. And if I’m having a down day, week, or month, what’s it matter if I do the work or get the things done? But, by talking about my mental health and using my own story to raise awareness, it makes it something that’s much bigger than myself.”
2. Don’t push yourself too hard.
“Don’t push yourself too hard at work,” says Richardson. “Acknowledge when you are struggling. It’s best to slow down early on than to keep going until you crash.”
Lewis learned this lesson through experience.
“Back in the day when I owned my own public relations firm, I would take on any client, under any circumstance, for any amount of money, and I’d make any accommodation or request they asked for. I ended up overbooked, underpaid, and at a point that was way beyond burnt out,” Lewis says.
“I kept trying to push my anxiety and depression aside to pretend like it wasn’t getting in the way, but the best thing I ever did was starting to tune into what my mental health was telling me. Only then was I able to shift into a business model that worked for me.”
3. Ask for help — and know your rights.
Richardson recommends going to your manager or supervisor for access to resources when your symptoms become too much to bear. If you work at a larger company, it may be more appropriate to get in touch with your human resources department.
This can seem intimidating, as you don’t want to give your superiors any reason to question your work ethic or your ability to provide value to the company.
But Perry, who now works full time in a remote position, notes that depression is covered by the Americans with Disabilities Act (ADA). This means your employer cannot fire you because of your disability — in this case, depression — and that they have to provide reasonable accommodations in order to allow you to do your job.
“Even if you don’t ask for accommodations, you need to make it clear that your absences or other work difficulties are based on a real medical condition,” Perry says. “Imagine being a supervisor with an employee who takes a lot of sick days, or may be easily agitated by interpersonal interaction or additional stress. In a vacuum, that’s a problem employee. Understanding the context, that’s someone who is doing their best to be a good employee despite a disability.”
4. Keep a healthy perspective on your career goals.
“It’s easy in a career to focus on goals, but this makes you vulnerable to depression,” says Richardson. “If you don’t get that promotion it might really impact you and lead to self-critical thoughts which fuel depression.”
He recommends instead harkening back to why you enjoy your work and the current position you’re in.
Lynch, who currently works as a freelance writer and editor, relates to the depression that can be felt when career expectations aren’t met.
“I try hard not to get angry at myself if I didn’t do as much as I’d like, or if my inbox isn’t bursting with inquiries,” says Lynch, “which is hard to deal with when you like to work and tie your work to your self-worth. But depression makes it difficult to look for clients. It’s a horrible, vicious cycle that I deal with only by telling myself this is temporary. It will get better at some point.”
5. Nurture hobbies and social contacts.
Lynch and Lewis both note exercise as a way of sustaining a healthy hobby. Lewis teaches yoga, and Lynch regularly attends a gym. While not the primary goal, a side effect of going to the gym or studio happens to be spending time with other people of similar interests.
Nurturing hobbies and maintaining social contacts are important from Richardson’s research — even if doing so initially feels overwhelming.
6. Practice mindfulness.
Finally, Richardson recommends practicing mindfulness, even when you’re not in the throes of depression. Emerging research suggests that mindfulness may not only alleviate depression, but could prevent relapses.
Richardson has produced a free mindfulness resource, which can be accessed here.
Depression and Your Finances
Career and finance often go hand in hand, so it’s no surprise that the ripple effects of depression can often extend into your finances as well.
By understanding and confronting these challenges head-on, there are strategies you can use to protect your finances as you learn to manage depression.
In a recent study published in the British Psychological Society’s Clinical Psychology Forum, Richardson studied people with bipolar disorder as they were going through a depressive episode. During these episodes, he found four key ways that their finances suffered.
Lynch notes that before she set up automatic payments, she would have trouble remembering pay upcoming bills. She’d get her statements, but ignore them. This led to unnecessary costs like late fees.
Richardson’s study finds that this behavior is typical for depressives. It found that missing bills was a financial manifestation of avoidant coping behaviors. In order to avoid being late on charges you may not know or remember exist, it’s important to get in the habit of confronting through that pile of mail as you establish the habit of paying through automation.
“It can be harder to keep track of your finances when things get tough,” relates Perry. “Monitoring spending, keeping up with due dates — it’s exhausting even in good conditions. If you spend more because of depression, or if you simply don’t keep as close of an eye on things, your budget could take a big hit.”
Perry’s insights are congruent with Richardson’s findings. Those with depression have a harder time completing tasks like budgeting because planning ahead is made more difficult. The study also revealed that rational thinking and the ability to remember past purchases in order to log them into a spreadsheet were impaired.
Perry says that when you’re depressed, you’re more likely to get caught up in comfort spending.
“This could be anything from convenience or junk food, which adds up, or going out for drinks, dinner, or entertainment. Alternately, you may be more likely to spend money on things that you think will make you happy or comforted — from convenience gadgets to home décor to clothes.”
Richardson adds the example of being overly generous with one’s family as an example of comfort spending.
Richardson’s study finds that financial stress compounds anxiety and depression. This stress leads to more dire mindsets, like extreme anxiety and hopelessness.
“As a business owner, there’s always so much pressure around profit,” says Lewis. “Even when you’re up, you never know how long it will last, so you have to keep hustling. When I’m going through a period of depression, this puts me in a cycle of ‘I’m never making enough,’ which is a thought that likes to pair itself with ‘I’m not good enough.’ Depression has a sneaky way of switching my mindset from one of abundance to one of scarcity.”
Lewis’s reports of low self-worth are also common, according to Richardson’s work. Self-criticism over “economic inactivity” was detected in study participants.
Seeking Mental Health Care
For help developing more coping strategies or getting resources that can help you manage your depression, consider seeking out mental health care services.
“I think all depressives — especially ones who aren’t on medications — should have therapists,” says Perry. “It may take a few tries to find someone you work well with, but then that person will be a great lifeline. Therapists can help you deal with the things that depression makes harder with strategies, workarounds, or just working through past events that are contributing to or causing your current depression.”
Therapy and medication management specialists can be expensive, though. Many regions in America face a shortage of mental health care providers, and the matter is further complicated when you consider that some providers may be out-of-network, bringing copays up even if you are currently insured.
If you can’t figure out how to fit these services into your budget, seek out therapists who offer sliding-scale payment options based on your income. Another affordable resource is public mental health care clinics, though their availability may be limited.
If you have insurance and don’t immediately need medication, keep in mind that a mental health care professional may not have an M.D. or Ph.D. after their name. Licensed Clinical Social Workers (LCSWs) and other counselors often accept insurance and are able to provide therapy, referring you out to a psychiatrist for prescription needs when necessary.
Lynch did seek therapy and go on medication for a while, though she now leans on other coping mechanisms such as avoiding triggers and exercising regularly.
“I recommend it if you feel you need it,” she says. “There is no shame in getting whatever kind of help you need.”
Today, Lynch operates from a place of acceptance. Depression is a part of her life that she has learned to deal with. While she doesn’t categorize herself as what we would consider classically “happy,” she does consider herself to be as content as possible, and actively seeks out happiness within her circumstances.
It’s no secret that most people feel lousy when they’re in financial trouble, and one of the biggest financial stressors seems to be debt. When you’re in debt, simple tasks like going to your mailbox, where you anticipate finding an avalanche of bills or overdue notices, can bring on stress. If you relate to this feeling, you aren’t alone. According to a Time article, there are a plethora of Americans in an excessive amount of debt. In fact, the Federal Reserve reported at the end of 2015 that, on average, an American between the ages of 18 and 64 has $4,717 in credit card debt.
So aside from being a burden on our wallets, what does this debt do to us?
“Financial issues are a common source of stress,” Dr. Jay Winner, director of the Stress Reduction Program for Sansum Clinic in Santa Barbara, California, said. “Additionally, when someone has extensive debt, there is a tendency to work excessive hours. This deviation from a healthy work-life balance leaves people less resilient to other stressors in their lives.”
How Debt Stress Impacts You
Chronic stress is linked to a wide variety of mental health ailments. Dr. Robert Williams, a psychiatrist in Phoenix, explained that long-term stress physically affects the brain through the well-known “fight or flight” mechanism, which occurs during times of perceived danger, such as those experienced when a threat to financial well-being occurs. Williams explained that when the deep limbic system, or primitive brain, is less active, there is generally a positive, more hopeful state of mind. When it is heated up, or overactive from too much stimulation in the form of perceived threats, negativity can take over.
In addition to an overactive limbic system, Williams said some people are born with a thin cerebral cortex. Emotional stability is a manifestation of the cerebral cortex, and studies suggest a relationship between depression and a thinning cerebral cortex. Dr. Williams said the combination of an overactive limbic system and a thinning cerebral cortex could lead to severe depression. Long-term stress from things like too much debt can cause anxiety, restlessness, lack of motivation or focus, feelings of being overwhelmed, irritability or anger, sadness or depression, even thoughts of suicide.
Coping With Debt Stress
If you are stressed because of a financial situation, here are some suggestions from Dr. Winner that may help you cope.
Be mindful. Focus on doing one thing at a time with your full attention.
Learn a relaxation exercise. Learning to relax for a specified period of time will help you learn to relax through the day and reduce stress.
Do not resist the stress. There are not much in the way of health risks from short-term stress; so if you’re too stressed now, don’t stress about being stressed. Just learn some strategies so the stress does not become excessive in the long term.
Learn patience. This is important because the emotion most strongly associated with heart disease is anger and hostility.
Decrease the frustration of failure. Instead of thinking you are worthless when things go wrong, realize progress comes from learning from our mistakes. Ask, “What can I learn from this?”
Keep things in perspective. One way to keep things in perspective is to think of your health, family, friends etc.
Take care of yourself. Eat nutritiously and mindfully, enjoying the taste and aroma of your food. Get regular exercise.
Have some technology-free time. If you can spend some of that time out in nature, that’s all the better.
Talk with someone. If you’re overwhelmed by stress and basic techniques are not helping, discuss this with a physician or mental health professional.
Paying Off Your Debts
Getting out of debt is one sure-fire way to help reduce your stress levels. Of course this is easier said than done, so consider taking small steps toward this larger goal. To start, gather all the information about your debts, including who you owe what amounts to and any interest rates or fees that are applicable to each of the debts. From there, consider what options you have. Can you consolidate your debts? Move the debt to a balance transfer credit card and eliminate interest charges for a while? You may even decide to seek the advice of a professional debt counselor to help you find the right path.
Whatever you do, take a deep breath and keep moving forward. Not only will paying off these debts help your stress, but it will help improve your credit scores. (You can see how paying down your debts are affecting your credit by checking out two of your free credit scores, updated every 14 days, on Credit.com.)