How Student Debt Creates Anxiety

Feeling overwhelmed by the amount of debt you owe? You are not alone.

With the staggering amount of debt owed by borrowers in the US, it may come as no surprise that some people may have constant stress and anxiety regarding their financial situation. After all, the average student graduates with $30,000 in the hole, and combined - 44 million borrowers owe an insane $1.5 trillion. There are many ways student debt can create anxiety for some borrowers such as increasing interest rates, burnout, monthly payments, low pay, among many others.

How student debt creates anxiety

The most common concern is not seeing the principal balance go down after months or even years of monthly payments. When most of the payments go towards interest and the amount originally owed increases nonstop, it can feel suffocating.

We spoke with occupational therapist Erika del Pozo, who is also the CEO/co-founder at Joy Energy Time and she shared her thoughts with us: “From my experience I am still in an income driven repayment plan. It creates anxiety because it is something that is constantly hanging over my head. Year by year the interest keeps increasing, and at one point I felt so defeated because I am paying 500 a month for something that is not going away.”

Some people are forced to put life on hold in order to keep up with their payments, this means postponing having kids, buying a house, or even having a wedding. It also disproportionately affects some students more than others given that in certain fields such as healthcare, a four year degree simply won’t get you too far. Forcing students to take on extra debt to complete postgraduate studies.
“In my profession, I see a lot of therapists, nurses, physicians, and other healthcare professionals who graduate with crippling debt. From my own experience, you graduate with this enormous debt and you don’t have any preparation to figure it out. You have a debt to pay but there isn’t any long term strategy. People say it impacts their well being, and life. It takes around 30 years to pay it off” Erika explains.

As a result of all this debt and the stress that comes with it, some people have developed a fear of money - where they are afraid to check their bank statements, or simply talk about finances. We asked Erika what her recommendations are to tackle this fear of money:
“From my own experience, and from a lot of people I know in healthcare. It is common to talk about being broke all the time, we can’t afford this or we can’t afford that. Our debt keeps us stuck, We graduated 5 or 6 years ago and we can’t start a family. What I encourage people to do is to change the dialog with money. Yes we are in debt but we can reframe it and develop a better attitude towards money. It is so easy to get caught up being this prisoner but you have to choose how you look at it.”

Burnout coupled with stress of loan payments can create student loan anxiety

Sometimes borrowers experience increased anxiety as a result of burnout from work on top of their constant student debt stress. The stress adds up and makes borrowers feel like they are trapped in an endless void.

“There are several options, we touched upon one such as travel therapy. Some therapists work for nonprofits → PSLF program. First adapt a new mindset around your relationship to money, read books, podcasts. Second is to find a job that you love, not just because it has a high salary or benefits - the quality of life is very important too. If you work somewhere you love, it can help tremendously to deal with anxiety.
Create a solid financial plan. You want to know how much you can spend on fun, how much you can save, how much you can allocate towards loan or living. Not living paycheck to paycheck. You need to create a stable financial life. You can live financially well if you plan ahead.”

Feel stuck with a job?

We know you have to keep up with your monthly payments, and this may make you feel like the pressure of having a stable job - even if you don’t like it. It can make you feel like you have to stay at a job you don’t like and you’re out of options.
Erika shared with us her advice on this matter:

“I would say first identify what you like and don’t like about your current job, is it something that can be changed or is it a variable that cannot be changed? For example, if you don’t like your job because of your schedule, you could talk to your boss to see what can be done. Maybe you want time to play with your kids, etc.
Could be worse, if its a variable that can’t be changed such as a toxic environment, it may start affecting your sleep and you may feel like you’re not doing your best work. Give yourself time to reevaluate your goals, your situation and your options.
Be grateful for the things that make your day better. You may be surprised to know how there are many other people who may feel trapped. Try talking to friends, see who else is feeling the same way. See who is hiring.”