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Ways to Relieve Student Debt Anxiety

Feel the weight of your student debts holding you down? Don’t be surprised to know you are not alone, according to a study by the American Psychological Association (APA), money is the second-leading cause of stress amongst adults in the US. It is normal to worry about debt, but you should know that your debt does not define and there are ways to manage student debt anxiety.

Here are some ways to help alleviate your student loan stress, shift your focus, and take control of your finances:

Know your loans and repayment options

The first step in taking control of your finances starts with getting to know your debt, the more you know the more control you will have over them. This will also help you understand your different repayment options and ultimately choose the one that suits your financial situation.
We recommend making a list of all your loans including :

  • Total balance
  • Lender
  • Interest rate
  • Repayment term
  • Minimum payment amount
  • Payment due date

Knowing this will help you manage your debt much better, and will help reduce the stress of not knowing about them.

Understanding your repayment options can also help significantly reduce the stress of your monthly payments if you feel they are too high and don’t give you room to breathe.

If you have federal student loans you may consider:

  • Income repayment plan: payments are capped at 10% of your discretionary income, this reduces your monthly payment.
  • Deferment or Forbearance: if you are going through a rough patch and can’t keep up with your monthly payments, you can apply for forbearance or deferment which allows you to temporarily pause student loan payments.
  • Public service loan forgiveness: if you meet the criteria, your loans may be forgiven through the Public Service Loan Forgiveness Program.

If you have private student loans:

  • Try refinancing at a lower interest rate: student loan refinancing replaces your existing debt with a new loan at a lower interest rate. It makes sense to refinance when you have a solid credit score and a stable income, in order to lock the lowest interest rate possible. If you have federal student loans you may also refinance for a lower interest rate, however, you would lose your federal program benefits such as loan forgiveness, forbearance and deferment, and income-repayment plans.

Read more about the benefits of refinancing and whether or not it’s right for you here.

Create a financial plan to tackle your debt

Knowing where your money is coming from and where it is going month to month, will make it easier for you to keep track of your spending and properly allocate your money towards your student loans. Adjusting your repayment plan to your budget is the best way to stay on track and not miss any payments.
Being aware of how much you are spending will help you be more conscious with your money in the future, and will help you reduce stress by helping you take control of your expenses.

If you want to learn more about how to build a budget, check out this article where we list the best practices and provide a free template to download and start saving.

Talk to family and friends

Going through student debt anxiety may feel isolating, especially because it’s a topic many people shy away from, but it doesn’t have to be that way. If you’re feeling anxious about your debt, talking with a close one can go a long way in helping you manage your stress and feel less alone. We tend to find sympathy in those that support us, and if you have friends or relatives who may be going through the same struggle then you may find some comfort knowing you are not alone.

Outside of your family and close friends, you may find resources to help in a supportive community. You could join a student debt community or forum on Facebook or Reddit, and listening to other people’s stories who are going through the same struggles may help you find a purpose on what you are doing and focus on the upside.

See if your employer can help

Some employers are offering student loan repayment assistance as part of the benefits package. You can talk to human resources and ask about ways in which they can support their employees with their student loans. Even if they can’t help you directly paying off the loans, they can point you in the right direction, whether it be financial or mental resources.

If you are overwhelmed with student loans and feel like they are taking a toll on your mental health, it might be time to reflect and talk to someone close to you or even seek professional help. Remember you are not alone, around 44 million Americans owe a combined $1.6 trillion in student loans. Don’t let your debt define who you are, and remember why you took out the loan in the first place. Student loans are an investment in education and any investment in your education is an investment in yourself and your future.

If you need assistance with your student debts we are here to help. At Snowball, we help you find the best course of action in paying down your student debt. We provide personalized recommendations based on your financial situation and compare against refinancing, optimizing payments, and federal decisions. You can learn more and sign up here.

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