How to Deal with Your Student Loan Debt

How to Deal with Student Loan Debt

The author of this guest post is Kristen Hawley. Kristen is a freelance writer with a personal interest in student loan debt. She blogs here to help others understand exactly what’s happening in the student loan universe.

Last year, average student loan debt in the US rose to $20,326 per borrower; nearly double the average amount from a decade ago. Leaving school — especially as an undergrad — with literally tens of thousands of dollars in debt feels daunting, even for those who fall well within the “average.” If you haven’t experienced the crush of student debt, you may not understand what it feels like to those of us who are dealing with tens (or in some cases hundreds) of thousands of dollars meant to be paid back through a pre-determined schedule by a lender.

Staying in the mindset that paying debt is a priority, but can be a challenge when you’re surrounded by peers who may not be in the same financial situation. Here are some tips on how to deal:

What it feels like to owe so much

When you owe so much money, your feelings about it vary depending on the day. There are days that you don’t think about it. There are the days you make your monthly/weekly loan payment, which is kind of depressing because your bank account takes a major hit — often nearly close to as big a hit as it does when you pay your rent. And then there are those days that you can’t think of anything except the fact that you owe as much money for your education as some people owe on their mortgages.

There’s a moment it hits you. For me, it was a night out in New York after ordering a $13 vodka tonic. Without debating the merits of spending $13 on a v-t (which was, honestly, a not-too-frequent occurrence for me), I suddenly saw the outstanding amount of my student debt projected in flashing lights everywhere I looked. Soon, the number started showing up anytime I pulled out my wallet: at the grocery store and at restaurants; spending $10 on a new shirt at H&M; during any time that I was making a non-essential purchase. My debt followed me everywhere, creating a massive cloud of anxiety

How it feels when you owe more than your friends

While the number of students accruing debt is growing,  I was in the unlikely position of having a friend group mostly made up of full scholarships and college funds. (In my case, I had plenty of help to go to my pricey dream school, just not enough to cover its full cost)

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Straight out of college, I became close friends with a group of girls in my new field of work. The benefits of a peer group of people who make your same meager, entry-level salary are great. As entry-level magazine editors, we found tons of great, cheap, fun restaurants, bars, events and parties in New York to keep us busy. There wasn’t time to envy others with better paying careers, we were having so much fun. Except that I was living on zero savings, completely paycheck to paycheck, while my similarly-paid friends were able to stash away some money as I tried to keep my head above water making minimum payments. I had to skip trips, nights out, and plenty of other fun because I literally had no money.

But after a year or so of paying as much of my meager salary toward my loans as possible and barely seeing a dent in the balance, the realization that this would be my life for the next thirty years hit… hard. You feel inferior to your peers. You feel silly for not understanding the scope of your own debt, and feel stupid for getting into your situation in the first place. There’s a lot of jealousy, and it’s hard to talk about… especially with someone who can’t empathize.

Ways to brighten your spirits when debt has you down

Not much is worse than the crushing cycle of debt realization and regret. But here’s the reality: you signed the papers and you owe the money, period. No amount of sulking, crying or wishing things were different will change the past or pay the bills. (Note: I am not a mental health expert, so if you are feeling hopeless, I do suggest speaking to one. They will help.)

With that said, here are a few mental relief methods that worked for me:

  • Take a walk. Go somewhere you love; somewhere where you can think clearly. Think about the reason you borrowed the money in the first place. (To get a quality education, to attend your dream school, to achieve something that no one in your family has achieved, etc.) Taking a step away from the billing statement and focusing on the reasons behind your decision to borrow will help re-center your mood and your priorities.

  • Focus on the progress you make each day/week/month. Instead of obsessing about the hit your bank statement takes, focus on the bottom line: your debt is decreasing every time you click the “Pay Now” button.

  • Don’t be a slave to the bottom line. Everyone’s budget is different, but try to fit in at least a few indulgences: a new shirt, dinner out, a fancy cocktail. Throwing every penny of expendable income at your debt is virtuous, but unless you’re laser-focused, it’s hard to pull off in the real world. That’s okay.

  • Get, and stay, informed. Part of the reason my loans were so scary is because I didn’t understand them. I didn’t understand the difference between federal and private loans; I didn’t understand the different interest rates. I didn’t understand my consolidation options. I didn’t understand the current government legislation. Learning everything you possibly can about your debt empowers you to make the best and smartest decisions for your own financial success. You will also be able to speak from a well-informed perspective. People respect this.

  • Budget. Treating yourself well is important, but smart spending will yield extra money to throw at your loans to help reduce your balance faster. Find your own balance, and do as much of this as you comfortably can.

  • Pay on time, every time. Large payments are terrifying, but you know what’s more terrifying? Two months’ worth of overdue large payments. Do everything you can to pay the minimum amount due on your loans each month. Besides keeping your credit in check, it will help you, again, feel in control of your situation.

Above all, remember: you are not alone in the struggle with student debt. The more we understand, the more we talk, the better we can support and advocate for change.

Image credit: kadmy

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