Impact of Being Weighed Down by Student Loans

The Psychological Impact of Being Weighed Down by Student Loans

This past June, by a vote of 6-3, the Supreme Court of the United States (SCOTUS) struck down President Joe Biden’s plan for student loan forgiveness. The plan would have forgiven upwards of $20,000 for borrowers and served as a beacon of hope for many borrowers drowning under high-interest college debt. Although President Biden says he is currently working on an alternate plan, the SCOTUS decision was a devastating blow to many borrowers who thought their burden would be greatly reduced or lifted completely.

As of 2022, over 43 million Americans carry student loan debt, with 9.9 million of those borrowers owing between $20,000 and $40,000. The debt burden can stop people from buying houses, pursuing the jobs that they want, or even deciding to start families.

What’s also troubling, and far less publicized, is the psychological impact of carrying a student loan balance. In a September 2022 study, 54% of Americans said they experienced mental health issues due to their student loan debt, ranging from depression to anxiety to insomnia. It is evident that the psychological impact of student loans is a pervasive problem — one that is likely to metastasize now that the forgiveness plan has been struck down.

The financial strain of student loans

The monthly student loan payments that people carry can often be a massive burden on a family’s budget, as some loan payments can be the equivalent of a rent or mortgage payment. With high-interest rates, the balances of these loans often stay stagnant, especially for people who have had to defer payments for one reason or another, or those who went into default at any time.

Loan payments can limit a family’s ability to save, invest, or achieve financial goals. The stress and anxiety of not being able to adequately provide for one’s family or move forward with one’s future can be a severe detriment to one’s quality of life, but the burden can be especially great if one is married and both partners owe on their student loans.

The choices are few

Another effect of the student loan burden is the lack of choices those who carry debt may have. Even if their student loan debt was acquired by studying a particular area of interest, people may need to instead seek out employment that pays the most — including one that may not be within their field of study.

This job-seeking out of financial necessity can make the debtor feel like all of the money they pay month by month was for naught. The flexibility of the family is limited by the need to pay back the loans in a field no one in the family may be working within. If the person carrying the debt seeks out the highest paying position possible to pay down the debt faster, this can have a detrimental effect on their work-life balance, their satisfaction with their career, and their overall mental wellness.

Communication is key

Within a couple or family structure, open communication is key to facing student debt head-on and eventually getting it paid off. It’s important to have honest conversations about how much debt is owed, repayment plans, budgeting, and realistic financial goals. Conflicts and misunderstandings that can arise from a lack of communication about debt can also lead to anxiety, depression, and feelings of helplessness, exacerbating the overall negative effect of the loans themselves.

With a clear view of how much is owed and a solid plan to attack the debt, couples and families can dig themselves out of the debt burden and look forward to a brighter future. A solid plan also serves as a salve to concerns of anxiety and sleeplessness that can come with the debt burden because, when one has a view of how debt can be resolved, they will likely sleep better at night. Working directly with a Licensed Marriage and Family Therapist, in addition to seeking the assistance of a financial counselor, can assist in helping families to navigate student loan debt and associated stress.

It is unclear what will happen with student loan debt and the federal government in the future, but what is known for sure is that there are still thousands of Americans grappling with the student loan debt crisis. Those who carry student loan debt must understand what the burden of that debt can do to them mentally and emotionally and educate themselves on how to address their debt to secure emotionally and financially sound futures.