Student loan debt is staggering – Americans carry over $1.6 trillion dollars in student loan debt. Last year, about 70% of students took out loans to attend college. And to cap that off, the average student loan debt held by Americans is over $30,000 per person All that to say, student loan debt is a serious problem! And it’s very likely that you’re feeling the stress of carrying this debt yourself.

Why Are Students Unable to Pay Back Their Debt?

In the United States, higher education is almost a must. College degrees lead to higher rates of employment. And when students are young, they’re continually told that going to college is important. In fact, college prep guides like this one from the Federal Student Aid website guide students through final exams and into college.

The conversations around the need for college lead students to believe that student loans are “good debt.” In some cases, taking out a loan to attend school can be a smart choice. If you land a high-paying job right after school, your borrowing was worth it!

Unfortunately, many students who borrow money for their education end up struggling to pay down their loans. It can take years of promotions to get to a comfortable financial situation.

Before attending college and taking on debt, it’s important to understand the average salary you can expect after graduation. Read that again! If you’re not sure how you’ll pay off your loans after graduation, think twice about the loan.

Students often struggle pay back debt when their student loans account for more than 10% of their take home pay.

When student loan payments eclipse your take home pay, this debt can lead to financial stress.

Should You Pay Off Your Student Loan Debt Early?

Unfortunately, this isn’t an easy question to answer with a yes or no!

Before you start trying to tackle your student loans, you have to take control of your finances in other areas. 

For starters, you should be saving part of your paycheck for an emergency fund. We’ve put together a complete guide to building an emergency fund. Having money in reserve is often more important than paying down interest payments.

Once you’ve got an emergency fund done, it’s time to start investing for retirement. Does your employer offer a 401k? Use it to get your retirement plan off the ground! If you’ve maxed that out, you can go for extra credit by investing in an IRA.

Once you’ve prepared these key areas of your financial life it’s time to look at your student loans.

The reason your student loans take a back seat to these other financial priorities is because student loans are more long term. An emergency could derail all of your other financial planning. But your student loans will still be there!

And not saving for retirement also doesn’t help your future. Because interest compounds quickly, money you invest today for retirement could be worth so much more later on.

Have you ever seen how much investing $1,000 this year would be worth when you’re old? It’s mind blowing.

4 Simple Ideas To Reduce Student Loan Stress

Once you’re ready to pay off your student loans, there are ways to do it that make sense for your finances. Paying them off without a plan could mean paying too much in interest or extending how long you’ll be making payments. Check out these 4 ideas to reduce your financial student loan stress:

[Bonus] 2 Tips for Living with Student Loan Stress

Living with stress can be difficult. Financial stress can lead to all sorts of physical and mental side effects. Dealing with your stress doesn’t just come from paying off your loans.

There are techniques you can use to mitigate your stress.

Get Some Exercise

You don’t have to reimagine your whole workout routine. But physical activity is directly linked to reducing blood pressure and stress. Financial stress can lead to some negative health side effects if left untreated. Getting your fitness routine in order doesn’t mean ordering a Peloton either! It could be as simple as taking a walk in the afternoon and getting some vitamin D.

Making a Plan

Having a plan and sticking to it may be more important than how much money you make. Just like a budget, a financial plan for your student loans gives you confidence. Knowing how your bills get paid gives peace of mind.

Even though you’re likely one of the tens of millions of Americans struggling with student loan debt, don’t let it overwhelm you! It can be manageable if you create a plan. Get your personal finances in order by creating an emergency fund and investing in a retirement fund. After that, it’s time to start paying down your loans early.