The Deadly Psychological Impact of Abusive Student Loans in America

Student loan expert

The Deadly Psychological Impact of Abusive Student Loans in America

Not everyone is talking about it, but the psychological impact of student loans is real — particularly for the 44.7 million Americans struggling to pay them.

This year, not much has changed to make a difference for student loan borrowers. Currently, the size of student loan debt is pegged at around $1.56 trillion — an unimaginable amount of money owed.

And as the shadow and sheer size of the student loan crisis continue to loom and escalate in the country, public discussions on student loans have become decidedly more heated. Everyone knows that the student loan is not simply a financial burden but also an intensely psychological one.

If you’re one of the millions seeking relief from student loans, Iron Fist Legal can help ease this burden through the use of proper legal processes.

Why student loan debt is different

Student loans are a type of consumer debt and, like all other types of loans, are taken out with the expectation that the amount will be paid in full (including interest and any fees incurred) by the borrower within a set time frame.

Consumer debt falls into two subcategories: secured and unsecured debt. Secured debt, as the name suggests, is backed or secured — usually by the item being purchased (e.g. a car or house).

Unsecured debts, such as personal loans, credit cards and medical debt, do not involve the use of collateral or the assignment of a guarantor. The only binding agreement is the debtor’s promise to pay the debt within a reasonable amount of time.

Student loans belong to the second category; however, unlike other types of unsecured debt, they are not treated in the same manner in case of nonpayment.

A primary differentiator of student loans from other types of unsecured debt is the fact that student loan debt does not ever go away. Other consumers struggling with most other types of unsecured debt have the option to file for bankruptcy. Student loan borrowers generally may not.

For those who do, there are very stringent requirements that need to be met for you to discharge a student loan debt through bankruptcy. You need documented proof of lasting undue hardship and good faith in making honest efforts to repay the loan. This applies to both federal and private student loans that are protected by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

For borrowers with federal student loans, there is no statute of limitations to fall back on, so your debt will never expire even if you ignore it for years. However, the federal government offers a form of respite from overbearing debt through repayment plans adjusted to the changes in the debtor’s circumstances, as well as loan forgiveness programs.

Since student loans are a form of unsecured debt, there is no collateral to repossess or foreclose on. There’s also no guarantor the creditor can chase. Thus, nonpayment of a student loan can lead to legal action, a lawsuit and the possibility of wage garnishment.

The psychological impact of debt in general

Americans live with debt every day. For most people, mundane daily purchases end with a credit card being swiped or credit card details being inputted online. You drop a dollar in a tip jar here and there.

You save receipts, but rack up bills and miss due dates — whether it’s for your mortgage, car payments, utilities, insurance premiums and so on. Sometimes, the cumulative outcome of these oversights leads to massive IOUs which, in turn, lead to stress and all types of negative consequences.

Cross-generational impact of abusive student loans

Based on Iron Fist Legal’s data, the consequences of stress and the current mental health crisis affecting a lot of Americans can be attributed in part to predatory student loans — and people from different generations are affected.

Suicides among GenX and Millenials over depression from abusive student loans

As of Q1 2019, the average loan balance of people belonging to Generation X stood at $39,584, while that of millennials averaged at $34,504. 

Gen X-ers, or people between ages 40 and 54, have the most student loan debt among the different generations. They are also the most stressed when it comes to credit card debt, and they experienced firsthand the effects of the last global financial crisis (GFC). All these factors, when taken together, help explain their bleak personal economic outlook.

Millennials (within the 25 to 39 age range) struggle with not only student loans but also stagnant wages, unemployment and their inability to afford housing. 

Depressed Gen X-ers and millennials saddled with despair from not knowing what to do about their debt sometimes withdraw from life altogether and have lingering thoughts of suicide — thinking that the only way out of the nightmare is by taking their own life.

The grim trend of “deaths by despair” has become part of the millennial mental health outlook. Why? Of all the generations alive today, millennials are disproportionately faced with unemployment, disillusionment after college, stagnant wages and higher rates of burnout. They suffer from less financial security as a result of their own parents being hit by the last global financial crisis, and they go through more periods of depression and anxiety.

If you find yourself in a similarly dire situation, whether you’re a Gen X-er or a millennial, know that you are not alone. Best of all, there are proper procedures and channels available to you that can turn your financial situation around for the better.

IRONFIST Legal can help you, and all you need to do is to let us know you need our help.

If you’re thinking about suicide, are worried about a friend or loved one, or would like emotional support call the National Suicide Prevention Lifeline at 1-800-273-8255.

Baby boomers losing their retirement to student loan payments

Baby boomers — people between ages 55 and 73 — owe an average student loan balance of $34,703 (as of Q1 2019), which is the second-highest among all generations and just slightly above that of millennials.

Of course, one would assume that most baby boomers’ student loans would have been paid off by now. However, a bulk of boomers’ student loan debt is attributed to parents taking out loans to fund their children’s education. This, in turn, threatens their ability to save for retirement.

Adding to this burden is the fact that the U.S. government garnishes Social Security checks of retirees with unpaid federal loans.

This shows that the burden of student loans span generations and its ill effects are being felt by millions of Americans.

Manifestations of debt-related psychological stress

Anyone who has ever owed a large amount of money to another person or an institution knows how it feels to be reminded of major debt. This condition can lead to a number of negative emotional outcomes, including the following:


Known as a mood disorder that leads to lingering feelings of sadness and a general lack of interest in life, depression can affect how a person functions in daily life.

According to the 2017 data published by the National Institute of Mental Health (NIMH), about 17.3 million adults in the United States experienced at least one major depressive episode

Student loan borrowers are at a high risk of suffering from depression. It manifests in many ways. You may feel like an utter failure. Work no longer brings you the security it used to give. You lose your concentration and always seem to be out of sorts. You make mistakes at work, and you sometimes find yourself in places you had no intention of going.

You no longer go out with friends. You avoid social events and miss your friends’ children’s birthday parties. You avoid meetings with your children’s PTA. You just want to be alone. Seeing your kids brings you pain, instead of happiness.

Fear and anxiety

Fear is a primitive emotion that has helped humans survive and cope with the challenges of life — both physical and psychological. It signals possible threats so a person can find ways of addressing or coping with the perceived threat.

Anxious feelings can be caused by various triggers associated with fear. These include constantly worrying about money, feeling overwhelmed, and hopelessness. One study reports that 29% of people suffering from high debt stress also suffer from severe anxiety.

When phone calls, emails, text messages and even messages from debt collectors sent via social media hound you, day in and day out, your instinct is to hide or escape. You jump at the sound of your message alert or phone call notification. You stop answering unknown numbers.

This is how fear and anxiety grip those who’ve lost all hope of paying off their student debt. The extent of this fear has even led to young adults not wanting to marry — especially not someone with the same financial insecurities as them.


The feeling of regret is associated with disappointment or sadness over a wrong decision or a missed opportunity.

Debt regret is an all too common feeling when student loan borrowers realize too late that they cannot live up to their financial obligations. They regret taking out a student loan, not trying harder to get a student scholarship or a part-time job, not saving up and not getting financial advice before taking out their student loan.

Lingering regrets can lead to feelings of hopelessness and depression.

Shame and embarrassment

The way people associate wealth with success has, unsurprisingly, made being in debt a taboo topic.

When you’re deep in debt you no longer walk with your head held high — whether at work or outside. It’s not something you talk about casually even with your closest friends. The fact that you seem to have mismanaged your finances or the fact that you’re not making enough money is a source of shame and embarrassment — something a lot of graduate students feel, according to the American Psychological Association (APA).

This is why, instead of seeking professional help, debtors wind up in more debt when they start behaving like nothing has changed — going for nights out and not refusing invitations to events they cannot afford.


Stress is a normal part of life as it is simply the body’s reaction to stimuli that require action or change.

However, chronic stress caused by debt can impact all aspects of your life: work, relationships, and your physical and emotional health. You may end up putting up with a stressful or dead-end job as it is your only source of income. You avoid going out with friends as doing so involves expenses. You deprive yourself of the food you want to stretch your budget, as you constantly worry about how you can pay off all your bills. In fact, another report by the APA states that 64% of graduate students are affected by debt in their day-to-day activities.

Getting out of debt and despair

Insurmountable debt brings with it unimaginable psychological stress. For some, life seems to lose all meaning, and nothing brings long-term satisfaction.

However, there’s a solution to every problem.

The first step you can take to resolve your student loan dilemma is by acknowledging that you have a problem and that you need to take concrete steps to break the cycle of pain. You can do this by:

  • Being open with the people who matter in your life: family, close friends, and significant others. Discuss your problem in detail and ask for their support — whether financial or emotional.
  • Getting qualified guidance to determine if you may have been misled about your student loans. If so, you may be able to cancel your loan through an attorney-based service like If cancellation cannot be achieved, there are other programs available through IRONFIST Legal to negotiate a better arrangement to address your situation.
  • Seeking the help of a certified financial planner to provide you guidance in your future financial decisions. This way, you’ll see what you can accomplish within your financial means.
  • Talking to a therapist who can help you break down the source of your struggles and pain. With a professional counselor, you can start taking small steps toward taking charge of your emotional health as you deal with your financial burdens.

One step is all it takes

There’s no shame in admitting you need help. It’s also incredibly important to take things a day at a time. Don’t rush and look for quick results. After all, everything worth seeking and keeping takes time to achieve.

Facing your problems head-on is equally important, as the more you try to run away from your debts, the harder the chase will be. But if you feel overwhelmed, there’s help and support that’s just a phone call away.

How we can help

If you are experiencing emotional distress or undue hardship due to your inability to deal with your student loan, your life shouldn’t stop there. A burdensome problem like abusive student loans is not something you can and should ignore. There are legal means of making things more manageable for you, so that someday, you can live the life you’ve always envisioned for yourself.

Turn your situation around with the help of IRONFIST Legal.

We are a student loan consumer protection company. We provide contract modification or cancellation services for student loan borrowers who were misled by their school, as well as for those facing undue hardship — both emotional and financial.

If you are eligible, IRONFIST can negotiate a significant reduction to your current loan balance by as much as 30 to 70 percent! IRONFIST will fight on your behalf to possibly get the contract cancelled completely.

So reach out to us today. With our help:

  • You can look at how our student loan modification program can ease your financial burdens.
  • You can start making loan repayments in a manageable way.
  • You can reduce your loan based on what you can afford.
  • You may be able to cancel your student loan contract completely and walk away.

With Iron Fist Legal by your side, you can someday wave goodbye to the challenges you are currently facing. We’ll take the burden of your student loan off your shoulders, once and for all.

Get in touch with IRONFIST Legal today.

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