‘It is a huge mental burden to the point of needing antidepressants’: I am drowning in student loan debt. How can I pay off $108k in loans that are mostly interest?

Hi Money Minder,

I (25 f) need your help! I’m drowning in student loan debt. My folks weren’t great with money and relied on private loans for everything from rent to books. After graduating, I consolidated my loans at 5.6%. For the past two and a half years, I’ve been shelling out $1000 a month (minimum’s $850) and making bi-monthly payments to tackle the principal. I started at 117k, paid off 9k, but $30k has gone to interest. Any tips? It’s such a heavy burden that I’m considering antidepressants.

Best,
Debt Disaster

Response from THE MONEY MINDER:

Hello There,

I am sorry to hear about the significant burden your student loan debt is placing on you, both financially and mentally. The path you’re on with regard to making bi-monthly payments and focusing on paying down the principal is a step in the right direction. Given the high-interest rate on your consolidated loans, it’s understandable why you may feel overwhelmed by the slow progress in reducing the balance.

Considering your current situation, it may be beneficial to explore options for refinancing your student loans to potentially secure a lower interest rate. Refinancing could help you save on interest in the long run and possibly reduce the total amount you need to repay. Additionally, consider speaking with a financial advisor or counselor who can offer personalized guidance on managing your debt and creating a realistic repayment plan.

In the meantime, continue making those bi-monthly payments and exploring ways to increase your income or cut expenses to allocate more towards your student loans. While it may feel like a lengthy process, each payment brings you closer to your goal of financial freedom. Remember that seeking help and taking proactive steps to address your debt demonstrates your resilience and determination.

Please know that you’re not alone in this journey, and it’s commendable that you’re actively working towards tackling your student loan debt. Keep going, stay focused on your goals, and know that there are resources and support available to assist you along the way. All the best from THE MONEY MINDER.