The national student loan debt in America is at a record high of $1.45 trillion.
It’s an almost mind boggling number. And it becomes even more staggering when looked at another way: there are 45 million student loan borrowers in this country, each of whom owes an average of $27,975 in educational debt.
This colossal burden is weighing heavily on millennials in particular, many of whom report that the debt is having a significant emotional toll, according to a recent study.
A joint study from LendEDU and Laurel Road found that 74.3% of those surveyed feel stress related to the student loan debt on a daily basis. In addition, 55.6% admitted that they felt self-conscious or embarrassed by their student loan balance.
It should go without saying that living with stress on a daily basis is bad for one’s health over the long term. If this describes how you feel, take heart, there are ways to manage both the debt and the negative feelings. Here’s what the experts had to say.
Be informed about your repayment options
One of the initial and most important steps to take to address the stress associated with student debt is to be informed about your repayment options.
“If you’re struggling to make your monthly payments, there are ways to decrease the amount of money you put toward your student loans each month,” said Brandon Yahn, founder of Founder StudentLoansGuy.
Yahn’s top two suggestions include refinancing your loans at a lower interest rate, while keeping a similar repayment term length or for those with federal student loans, shift them to an income driven repayment plan (if your income allows for this).
It’s important to note however, that income driven repayment plans only apply to federal loans and could ultimately increase your overall debt, says Yahn, by stretching out the repayments over a longer period or increasing the amount of interest you pay, so be cautious and do your homework before choosing this option.
Develop a concrete repayment plan
Numerous experts agree that the simple act of developing a repayment plan can significantly alleviate the emotions tied to student loan debt.
“To address the stress, the debt-reduction plan itself helps greatly because people see the debt going down month after month, which is very encouraging,” said Christine Luken, a money coach who is a member of the Financial Therapy Association and author of Money is Emotional: Prevent Your Heart from Hijacking Your Wallet.
That plan should include making paying student loan debt a priority. Many millennials have resigned themselves to the fact that they will always have student loans. This doesn’t have to be the case.
“I first have my clients tackle high interest credit cards, then use that freed up money to hammer away on the student loans, no matter what the interest rates are,” said Luken.
Financial Analyst, Dock David Treece, of FitSmallBusiness agrees, noting that...