Money Happens: Tips for dealing with student loan debt when it affects your mental health

NEW YORK (AP) — Between her college and master’s degrees, Justene Bologna accumulated over $200,000 in debt. It has affected not only her finances but also her mental health.

“I have severe stress and anxiety,” said Bologna, 30.

While student loan debt is at the root of Bologna’s worries, it’s not her only financial constraint. After she gave birth to twins a few years ago, she also accumulated medical debt. Her debt has impacted how much money she has in the day-to-day, impacting her ability to afford groceries and other basic needs. But it also is affecting her relationships.

“Sometimes people underestimate the way that these big financial stresses impact all of the aspects of our lives,” said Helen Colby, a professor at Indiana University.

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EDITORS’ NOTE: The Money Happens series explores challenges and anxieties around money and offers helpful tips for dealing with them. Each episode features a case of an individual experiencing a challenging financial problem, whether it’s student loan or credit card debt, and an expert who can help provide strategies for working through these issues. You can listen to all of the episodes here.

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After student loan payments were paused during the pandemic, more than 40 million Americans started to pay back their federal student loans. The rising cost of living combined with an increasing amount of other types of debt is causing issues for many people.

If student loan debt is affecting your mental health, here are three tips for you:

1. Set time to not think about debt

Debt can quickly become overwhelming, consume your every thought and prevent you from planning for your long-term goals. To avoid this, Colby recommends setting specific times when you don’t think about your financial worries and focusing on the bigger picture.

“Sometimes we can give ourselves permission to stop worrying about those other things and focus on the big picture if we delineate the time,” Colby said.

When focusing on bigger-picture plans, some might find they need to pivot careers to earn a higher salary. Others might find that moving to a cheaper city could help them save on rent to pay off their debt. Whatever your plan is, setting aside some time can help, even when you’re stressed about debt, Colby said.

2. Practice mental bootstrapping

Dealing with your finances requires knowing how much debt you have and making a plan to pay it off. But what happens when the thought of sitting down and looking at that dollar number is overwhelming? This is when you practice mental bootstrapping, Colby said.

“It’s this idea that, if you’re going to do something you really don’t want to do, either giving yourself a reward afterwards or doing something fun and then going to do that thing that you really don’t want to do,” Colby said.

For example, you could watch one hour of your favorite feel-good show before spending one hour reviewing your budget. Or, after spending a couple of hours making a plan to pay off your debt, treat yourself to your favorite dessert.

Pairing something that brings you joy with something that stresses you, like looking at your finances, can make your goals easier to achieve.

3. Don’t be afraid of sharing your worries with loved ones

Debt can make you feel isolated, so sharing your experiences with your loved ones can be helpful for your well-being.

“In many situations, I talk with people and their family doesn’t know they’re struggling, their friends don’t know, their boss doesn’t know,” Colby said. “And you don’t necessarily have to share everything.”

Sharing as much or as little of your financial concerns as you feel comfortable with can help alleviate some of the stress that you feel.

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The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.