NEWS

For Many Borrowers, Student Loans Are a Mental Health Crisis

student loan illustration

Verywell / Bailey Mariner

Key Takeaways

  • Student loans place a heavy financial strain on many borrowers.
  • Wages have not risen to match the dramatic increase in the cost of higher education.
  • The strain of debt and its financial implications leads to negative mental health outcomes.

There have been many discussions in recent years around student loans and their effect on our economy and society. Given the financial struggles many people have experienced during the COVID-19 pandemic, the $1.6 trillion in U.S. student debt has once again come to the forefront.

Mandatory payments and interest on federal student loans have been suspended since March, but loan repayments are expected to resume on January 31, 2021. The financial strain of these loans has caused significant stress, anxiety, and depression in borrowers who have struggled to keep up with their payments along with their other obligations.

As the cost of higher education has skyrocketed in recent decades, average wages have generally not increased to match it, especially at lower income levels. It's much more difficult than it used to be to work your way through college and to pay for it afterwards. For recent generations of kids who have had the idea of attending college drilled into them from an early age, this can be a tough pill to swallow.

The financial burden of this debt—over $30,000 for the average borrower—limits the ability to buy houses, start families, or build businesses, and in turn damages the mental health of those who are eager—but wholly unable—to establish financial security in their lives.

How Can Debt Impact Your Mental Health?

Amy Morin, LCSW, Editor-in-Chief for Verywell Mind, says, “Student debt can take a serious toll on your mental health. Studies have linked student debt to lower levels of psychological well-being, regardless of income.”

Even though the income level of a student does not rid them of the stress that debt brings, there is data that shows students may choose a career after college based on their loan amounts in effort to pay them off faster. This can potentially lead graduates away from their preferred employment, adding yet another stressor.

Brooke Taylor

It feels overwhelming to think about always having these loans, and never being able to do the things that everyone tells you that you’re supposed to do, like buy a house and start a family, when you have six figures of student loan debt and no way out.

— Brooke Taylor

Brooke Taylor, a Virginia-based educator and business owner, identifies with the economic strain lofty student loans provide, saying, “I’m 31 and would like to buy a house, and my loans definitely impede that. What really gets me is the interest. It feels like you’ll never be able to pay them off because of the amount of interest that is tacked on every month. Well over 30,000 dollars has been added to my loans just in interest alone."

In the years since the 2008 financial crisis, the job market has made it difficult for many graduates to find the kind of work that might have previously been available. Yet more and more jobs are requiring education beyond a bachelor's degree, with an expected 16.7% jump in jobs that require a master's degree by 2026.

The added cost of a graduate degree creates a very high barrier to the types of jobs that could make it easier to pay down debt. And if fewer of those jobs are available, that makes for a lot of graduates carrying debt without the ability to pay for it.

Taylor also agrees that the financial implications are what connect to the mental health strain. “It feels like there’s no way out,” they say. “It feels overwhelming to think about always having these loans, and never being able to do the things that everyone tells you that you’re supposed to do, like buy a house and start a family, when you have six figures of student loan debt and no way out.”

Debt and a Lack of Control

While Taylor has learned ways to mitigate these negative feelings, they are definitely not alone. Morin references diagnosable repercussions of looming debt. "Student debt has been linked to depression, anxiety, and even thoughts of suicide," she says. While not everyone with student loans gets to the point of diagnosable depression or anxiety, it is possible, and it's important to get help if needed.

Feeling incapable of changing the circumstances is another example of the dread that accompanies this sort of debt. Feeling like you have no control over your life and your finances can be draining for many, which we have seen amply throughout the pandemic. People with student loans who lost their jobs during the pandemic may be feeling even worse about their debt than usual, even without having to make payments.

“During a time when you could be excited about the career ahead of you, debt can cause you to feel overwhelmed and hopeless about the next chapter in your life.” says Morin.

What This Means For You

Student loans are stressful, regardless of your income level. Individuals at every level of employment struggle with debt associated with higher education. If you are dealing with student debt, you've likely had to figure out how to navigate the negative feelings it can provoke.

Feeling trapped by your financial ability is not uncommon, and there are options, such as public service loan forgiveness or income-based repayment, that can help to some degree. If your financial stress has led to depression or anxiety, finding a therapist can help you find ways to manage the negative feelings that come along with your debt and its hardships.

The information in this article is current as of the date listed, which means newer information may be available when you read this. For the most recent updates on COVID-19, visit our coronavirus news page.

Was this page helpful?
5 Sources
Verywell Mind uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Kerr E. See 10 years of average total student loan debt. U.S. News. Published September 15, 2020.

  2. Office of Federal Student Aid. Coronavirus and forbearance info for students, borrowers, and parents. 2020.

  3. Tran AG, Mintert JS, Llamas JD, Lam CK. At what costs? Student loan debt, debt stress, and racially/ethnically diverse college students’ perceived health. Cultur Divers Ethnic Minor Psychol. 2018;24(4):459-69. doi:10.1037/cdp0000207

  4. Pisaniello MS, Asahina AT, Bacchi S, et al. Effect of medical student debt on mental health, academic performance and specialty choice: a systematic review. BMJ Open. 2019;9(7):e029980. doi:10.1136/bmjopen-2019-029980

  5. U.S. Bureau of Labor Statistics. Occupational Employment Projections Through the Perspective of Education and Training. Published January 2019.