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The Emotional Toll of Student Loans Debt
Getting a college education can be an exciting experience. A college education can pave the way for personal growth and future opportunities. However, higher education costs have risen significantly over the past few decades. Thus, millions of Americans resort to students loans to fund their college education.
Having a student loan debt is one of the most significant financial and emotional burdens young Americans face today. Student loan repayment has taken a toll not only on the financial health of the borrowers but is affecting their relationships, mental well-being, and overall quality of life.
The Financial Burden of Student Loan Debt
Student loan debt is the amount of money an individual borrows to cover the cost of his education. The debt is repaid over time with interest after the borrower completes his education and joins the workforce.
In recent years, educators, policymakers, and the public have focused their attention on the issue of student loan debt. However, the challenges associated with student loans remain complex.
After joining the workforce, graduates find it challenging to realize their financial goals—starting a family, buying a home, having children, or saving for retirement. Paying substantial student loans impacts their financial well-being, leading to financial stress and anxiety.
A high student loan debt can also delay an individual’s retirement plans. The longer it takes for an individual to pay off debt, the later he may be able to save enough for his golden years while repaying his loan.
A student loan typically comes with various repayment options, such as standard repayment, extended repayment plans, student loan refinancing, and income-driven repayment plans. Even with the many options, higher interest rates can significantly increase the total amount of the loan.
Many graduates feel pressured to prioritize higher-paying jobs over their career goals to meet loan repayment obligations. The financial burden of student loan debt can limit an individual’s career choice and the pursuit of his true interests and passion. An individual may be reluctant to leave a stable job or venture into business because he needs a steady income to manage his student loan payments.
Frequently, borrowers amid financial hardship can apply for forbearance or deferment to temporarily reduce or suspend loan payments. These options can provide short-term relief but accumulate more interest, leading to a high total loan cost.
Federal direct loan borrowers can avail of student loan forgiveness, a program that eliminates a portion of a borrower’s federal student loan. A borrower can qualify for this program by working in public service. The program does not cover private student loans.
The Emotional Toll of Student Loan Debt
Student loans can affect borrowers’ physical, mental, and emotional well-being. Large amounts of debt can cause:
- Stress
- Anxiety
- Depression
- A feeling of hopelessness
- Shame
- Guilt
- Burnout
- Lack of motivation
- Negative self-perception
In short, large amounts of student loan debt can affect the borrower’s overall quality of life.
How to Cope with the Emotional Toll of Student Loan Debt
It can be challenging to cope with the emotional aspects of having student loan debt. Here are some strategies you can do to help manage your feelings and improve your overall well-being:
- Acknowledge your emotions surrounding your student loan debt.
- Practice self-care by engaging in relaxing activities to manage stress and anxiety.
- Share your feelings with family members, friends, and support groups.
- Speak to a mental health professional or counselor and ask for coping strategies and support that match your situation.
- Explore repayment options.
- Regain control of your financial goals by setting realistic and achievable steps.
- Create a budget to manage expenses to identify areas where you can save to allocate funds for loan repayment.
- Invest in skills and career development to increase your earning potential.
- Contact your loan servicer and ask for temporary solutions such as deferment or forbearance to help deal with difficult times.
Coping with the emotional toll of student loans requires a holistic approach that includes the borrower’s financial aspect and emotional well-being. Dealing with the emotional part of student loan debt takes time, so you must be patient and celebrate small victories.
The Benefits of Applying for Student Loans from Federal Credit Unions
Federal credit unions are non-profit financial institutions owned by members. Thus, they offer better student loan benefits compared to loan offers from traditional banks or private lenders.
- They have lower fees and few hidden costs compared to some private lenders.
- They provide personalized customer service and are willing to work with borrowers facing financial difficulties.
- Members can avail of flexible repayment terms such as income-based or adjusted repayment plans.
- Some credit unions offer loan forgiveness programs for borrowers working in non-profit organizations or specific fields.
- Credit unions always prioritize their members’ needs and well-being.
Federal credit unions operate as cooperative financial institutions. Thus, members have a say in the management of the institution. This structure fosters shared values among members and a sense of community.
Federal credit unions each have their membership criteria, but it is easier to become members and avail of their services compared to some private lenders. Many credit unions have local or regional branches allowing them to cater to the needs of community members. This local focus will enable them to offer more personalized service.
It is crucial to note that all federal credit unions have eligibility requirements. As in the case of Greater Alliance Federal Credit Union, one has to live, work, worship, attend school, have a listed business, or have immediate family members in the credit union community.
Greater Alliance Federal Credit Union (GAFCU) has over 85 years of commitment to its members and the Bergen & Passaic Counties of New Jersey communities. Greater Alliance Federal Credit Union’s financial products include savings, checking, business accounts, loans, and insurance.
Greater Alliance Federal Credit Union offers In-school Student Loans to members with consignors, a current student or graduate of an eligible school, and a U.S. citizen or permanent resident. Student Refinancing Loan is also available.
Conclusion
Many individuals want a college education to have better career opportunities. However, many students have to resort to student loans due to the high cost of college education.
Having to pay a student loan debt often has financial and emotional implications for the borrowers. Greater Alliance Federal Credit Union offers student loans that can help lessen or eliminate financial and emotional effects on borrowers.