The ongoing federal student loan payment and interest freeze that has been in effect since March 2020 has given millions of borrowers a temporary break from paying down their student debt.
But it hasn't totally relieved borrowers of the mental strain that comes with carrying such a heavy debt burden.
In fact, a recent survey by Student Loan Planner found that 1 in 14 respondents had suicidal ideation at some point due to student loan debt (an increase from their 2019 findings) and 1 in 17 reported experiencing suicidal ideation in the past year alone.
Below, Select has some advice to borrowers who are facing anxiety over conquering their student loan debt.
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1. Make a plan
Having a strategy for how you will tackle your student loans is the best way to alleviate the stress of your debt, says Andy Taylor, founder and CEO of Douugh, a smart banking app that helps users autonomously manage their money.
"If you can visualize when you're able to pay off the loan, then you can find some peace of mind," Taylor tells Select. "Oftentimes, student loans feel overwhelming because they seem like such a huge hurdle to overcome."
Sometimes, making a plan is half the battle. Start with creating a realistic goal for where you want your debt load to be within a year and then calculate how much you can contribute each month to reach that goal. If you can afford to do so, paying more than the minimum due each month is a smart way to effectively pay off your debt faster. Make sure when you're making these extra payments, they're being applied to the loan principal, not just the interest.
Federal student loan borrowers should consider making monthly payments even during the current forbearance period. With interest set to 0%, these payments go directly to your principal, which helps you pay off your debt faster.
2. Automate your payments
Once you make a plan, consider automating your monthly student loan payments. Automating ensures you chip away at your debt without having to think about it each month — also known as "set it and forget it." The key here is to make paying down your student loan debt a built-in habit.
Another perk of automation? Setting up autopay on your federal student loans will likely lower the interest rate on your loans by 0.25 percentage points. It might seem like a small thing, but it really can make a big difference.
3. Get a lower interest rate
If seeing your student debt balance balloon is what contributes to your anxiety, getting a lower interest rate might help.
Refinancing your student loans means trading in your current loan(s) for one new, consolidated loan through a private lender.
Through refinancing, you can earn a lower interest rate while also having the opportunity to choose a loan repayment term that works best for your current financial situation. Perhaps you want to accelerate your debt payoff and shorten your loan term by making higher monthly payments each month. Or you could choose to extend your loan term so that your monthly payments are smaller.
Breaking your debt into smaller, more manageable payments may help you feel more at ease, says Taylor.
With federal student loan payments on pause and interest set to 0% through August 2022, federal student loan borrowers should wait to consider refinancing until the forbearance period ends. (Just keep in mind that you lose any federal loan protections if you ever do refinance down the road.)
On the other hand, refinancing right now is a good idea for private student loan borrowers since rates still remain low.
Most lenders require you to have good credit, Earnest Student Loan Refinancing allows fair credit applicants with a minimum credit score of 650 to qualify, and there are no minimum income requirements.
Actual rate and available repayment terms will vary based on your financial profile. Our lowest rates are only available for the most credit qualified existing cosigned loan borrowers who receive the 0.25% Loyalty discount and requires selection of our shortest term offered, full principal and interest payment while in school, and enrollment in our 0.25% Auto Pay discount. Enrolling in Auto Pay is not required as a condition for approval. Interest rates are subject to change.
Residents of Hawaii must request a loan of at least $1,501.
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option.
To be eligible for the Loyalty Discount, applicants must have previously obtained an Earnest Private Student Loan and apply using the same email address associated with that loan. Only one Loyalty Discount may be applied per eligible Earnest Private Student Loan. Not all applicants may qualify. This offer cannot be combined with Earnest's Rate Match program. Earnest may modify or discontinue this offer at any time and without notice, however, once a Loyalty Discount is earned, it will not be taken away.
Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.
Earnest clients may skip a payment through a single, one-month forbearance during a 12 month period. Your first request to skip a pay can be made once you've made at least 6 months of consecutive on-time full principal and interest payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Any unpaid accrued interest may capitalize (added to the principal balance) at the end of the forbearance period by adding unpaid accrued interest to the outstanding principal as permitted by law and the terms of the loan agreement. Please note that skipping a payment is not guaranteed and is at Earnest's discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.
4. Ask for help
No matter how big or small your student debt load is, there are professionals whose job it is to help coach you through the emotional burden of it all.
The National Foundation for Credit Counseling (NFCC) offers a portal for people to call and receive free credit and student loan guidance from a nonprofit credit counselor.
There can be something cathartic about having a professional present all your payment options for you. Knowing that you have choices can relieve some of the stress.
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If you are having suicidal thoughts, contact the National Suicide Prevention Lifeline at 1-800-273-8255 for support and assistance from a trained counselor. If you or a loved one are in immediate danger, call 911.
