Whether you’re a prospective student trying to figure out how to pay for school or a current student who has taken out student loans but isn’t yet in repayment, you could be facing a very real fear of student loan debt.

According to College Access & Success, 62% of college seniors who graduated from public and private nonprofit colleges in 2019 had student loan debt and owed an average of $28,950. It’s no wonder the topic of student loans can seem scary, but it doesn’t have to be! Here are five things to remember to avoid being spooked by student loan debt.

How to Rationalize Your Fear of Student Loan Debt

1. Assess Your Situation

One of the worst things you can do is bury or ignore the anxiety of student loan debt. Not being able to cover your tuition or housing costs could impact your ability to attend school. If you already have a loan, ignoring your fears about repayment might lead to mismanagement of your loan.

Face your fear head-on by assessing your situation. Remember, college loans are there to help get you through school and eventually achieve your dreams. Build a budget and figure out how much money you can afford to pay back each month while you’re in school, and estimate how much you expect to pay back after you graduate. Your loan servicer, or the company that sends your monthly statements and tracks your payment history, can be a great resource to help you create a plan for your situation and the options you have going forward. You might find they have all the information you need to get yourself in a better position. 

2. Find Options with Flexible Repayment

It’s no mystery why so many people have student loan debt fear. The news paints student loans as a horror story, but with flexible repayment options, they aren’t as scary as people make them seem. If you have a student loan already or are thinking about getting one, you should review your flexible repayment options with your loan servicer and see if there are options to help you better manage your finances.

Federal student loans have fixed, graduated, and income-driven repayment options.

• Standard 10-year Repayment (fixed): This is the plan everyone gets assigned. This plan is to help you repay your loans in 120 equal payments in 10 years. It is usually the most expensive monthly payment, but you pay the least in interest over the life of the loan.
• Graduated 10-year Repayment (graduated): Also completed in 10 years, this plan starts low and increases every two years. It’s good for anyone who can’t swing the standard 10-year plan but knows their income will continue to grow in the future.
• Extended Repayment (fixed): This plan is for those who can’t afford the shorter loan period repayment plans. You’ll make 300 payments over 25 years. These payments are much lower than the standard 10-year or graduated plans, but you pay a lot more interest over the life of the loan.
• Extended Graduated Repayment (also known as Graduated Repayment or Progressive Repayment): Much like the fixed extended plan, this plan is also 300 payments over 25 years, but the payments increase every few years, making the early years very inexpensive. You’ll end up paying a lot more in interest, making this a very expensive plan in the long run.
• Income-Driven Repayment (income-driven): There are different forms of income-driven repayment. They all base monthly payments on the borrower’s income and family size, making this a flexible plan for those struggling with their loans. Payments can even be as low as zero dollars per month. The balance may be forgiven but taxable after 20 or 25 years (depending on the plan).

Private undergraduate student loans and loans for graduate students typically have multiple repayment options depending on your lender. Before borrowing with cosigner loans or student loans with no cosigner, check with the lender to find out all of your options and ensure you can fit the monthly loan payments into your budget.

3. Choose a Loan with Postponement Options

Suppose you’ve hit a financial bump in the road after graduation, such as losing a job, medical issues, or general financial hardship. In that case, student loans may be the most versatile form of debt in your portfolio. Whether you have federal or private loans, there’s almost always a postponement option for you.

For federal loans, there are student loan deferments that allow you to postpone payments for up to 12 months at a time where interest doesn’t accrue on subsidized loans. Your federal unsubsidized loans will accrue interest. Federal forbearance periods are like federal deferments in that they allow you to temporarily stop making payments for a period or reduce your monthly payment. However, it’s important to note that while you pause your federal loans, they will continue to accrue interest during the postponement time. The time limits for these postponements vary, but you can learn more here.

Private loans almost always have a forbearance or deferment option as well. Visit our FAQ page to learn more about Ascent’s options.

4. Find Loan Forgiveness

There is a multitude of student loan forgiveness programs out there. Loan forgiveness applies typically for circumstances such as death or disability, but other programs are out there.

One well-known forgiveness program is the federal Public Service Loan Forgiveness (PSLF) program. This program forgives your remaining balance after making 120 eligible payments on a federal Direct loan. Still, you must work at a qualified government, public service, or not-for-profit organization and be working full-time. This forgiveness program can be a great option for teachers, public defenders, social workers, and rural health care workers.

The opportunities don’t end there, though! There are many other federal, state, and private loan forgiveness options. Depending on your profession and where you live, these programs can alleviate much of what might seem so “scary” about student loans.

5. Take It One Day at a Time

Understanding your finances isn’t something to take lightly, and that includes any debt you may have. Managing your student loans doesn’t mean they have to be all-consuming either. If you’re letting your loans hang a dark cloud over your head, just remember that you have options. Work with your loan servicer or lender to tackle your payments one step and one day at a time.

Frequently Asked Questions

How can I stop worrying about student loans?

To ease your anxiety over student loan debt, know that resources help you be more comfortable. You have access to flexible repayment plans and payment postponement options. You may even qualify for certain student loan forgiveness programs. 

Should you be scared of student loans?

While you should take student loan debt seriously, you shouldn’t have a fear of student loan debt. These loans can help you earn your degree and start the life you always dreamed of enjoying. As with all things that relate to finances, be careful with student loans, but they can be manageable and far from scary with a plan in place. 

Is student loan debt really that bad?

In an ideal world, we’d all be debt-free, but the truth is some loans are helpful. Having student loan debt isn’t as bad as the story on the news — it means that you earned an education. That’s something that can continue to deliver value to your life, even as you continue to pay off that debt. Of course, the goal is to eventually pay off your loan debt over time as you get farther along in your career.

Read More Tips

Ascent strives to provide you with the information you need to make the best financial choices possible, providing student loan support and financial wellness resources while you’re in school and beyond. Check out our blog to stay current on the latest tips and tricks to help you achieve your goals.