It’s Thanksgiving – the time of the year when we all reflect on thankfulness and what we’re grateful for. From friends, family, our careers, or maybe a recent life event, chances are you have much to be grateful for when push comes to shove. But what about your student loans?
Probably not the first thing you think of when discussing being thankful. You might even have strong negative feelings towards your student loans, your servicer and the lender itself. Totally understandable. But the reality is that if you have student loans, you actually have several things to be thankful for and acknowledging it can go a long way towards making you think and feel better about the situation.
So, during this holiday season, we’re reminded of the power of gratitude. Here are a few reasons borrowers might feel thankful for their student debt this year:
1. Your Student Loans Made Higher Education Accessible
In fact, according to recent data, 71 percent of college graduates carry student loan debt. For these graduates and their families, student loans provided funding that brought a college education within reach. Without student loans, they probably wouldn’t have been able to pay for college. Perhaps you could’ve made your college costs work, but you would’ve made compromises like choosing a lower-cost school or taking longer to complete your degree and paying as you went.
Student loans can be a pain to pay off, but the bottom line is that it’s important to remember the opportunities they helped you access along the way.
2. Student Loans Are An Investment In Yourself
Using your student loans to earn a degree can be an important investment in yourself. College is worth the investment and provides lifelong returns, including:
- Higher pay: College graduates with a bachelor’s degree earn 67 percent more on average than high school graduates, according to the College Board’s Education Pays 2016 report.
- Better benefits: College graduates often receive better benefits thanks to the jobs they have access to, such as retirement accounts and health insurance..
- Steadier employment: Among workers over 25, the unemployment rate for individuals with a bachelor’s degree or higher is about half the unemployment rate for individuals with a high school diploma.
Instead of viewing your student loans as a money drain, view them as the first major investment you made in yourself. The skills, know-how, and the boost to your market value you get from a college degree can’t be taken away from you.
3. Federal Student Loans Have A Robust Safety Net
Of course, not every student gets a high-paying job right out of college or is continuously employed for the 10 years they are repaying their student debt. Fortunately, federal student loans have robust protections in place to help borrowers who are in a tight spot.
Federal student loans include many options to manage student debt during a hardship. Whether you need to lower your monthly payments or pause them all together, you have the following choices:
- Deferment and forbearance can be used to pause monthly payments temporarily or for up to three years at a time. You might have to demonstrate a need for deferment or forbearance, such as unemployment or another economic hardship.
- Income-driven repayment plans can lower your monthly payments to match your income, costs of living, and family size. If you have low income relative to your expenses or student loan balance, an income-based repayment plan can provide relief.
- Student loan forgiveness also can be an option. Public Service Loan Forgiveness (PSLF) offers loan forgiveness after 10 years to workers who work for the government, qualifying nonprofits, and other qualifying employers. Some income-driven repayment plans also provide forgiveness after 20-25 years of repayment.
These federal student loan protections can be a huge help to borrowers who land in a tough spot. No matter what comes up in life, federal student loans will be one of your most flexible forms of debt in repayment. If you hit a rough patch, you have options for managing your student debt and avoiding student loan default.
4. Student Loans Can Help You Build Credit
For many student loan borrowers, student loans are their introduction to borrowing wisely and managing debt. Student loans impact your credit and can be used to build good credit thanks to the following:
- On-time payments: Keeping up with monthly payments is the best and most important way you can make sure your student debt is building good credit. On-time payments account for 35 percent of credit scoring models.
- Credit mix: As you add credit cards and other accounts to your financial portfolio, student loans will help you maintain a healthy credit mix.
- Length of credit history: Student loans are common among borrowers’ first and oldest credit accounts, and length of credit history also can give a credit score a boost.
Of course, no one should take on debt simply to build credit. You’ll also need to stay on top of your student debt to ensure you never miss a payment or otherwise mismanage it, which could land you with a derogatory credit mark.
5. Gratitude Can Make You A Wiser Borrower
One study showed the power of gratitude as a tool to do better with your money. Participants were asked to journal on topics that made them happy, grateful, or neutral. Then, they were offered money, with the option to receive a smaller amount immediately or a larger amount in one week to six months.
Those who had journaled about gratitude were significantly more likely to choose to wait to get more cash, compared to the neutral or happy groups. The authors of the study concluded their findings were evidence that “the emotion gratitude reduces impatience even when real money is at stake.”
In other words, when you feel grateful, you’re more likely to put long-term goals, such as paying off student debt, ahead of short-term gratification. You might find it easier to resist an impulse purchase that might prevent you from making your student loan payment on time.
That makes it worth thinking through your own student debt journey and finding the positives. Take the time to recognize the ways your student loans have helped you unlock doors. And consider whether dealing with your student debt has made you better at budgeting or managing your money.
Of course, it’s not all sunshine and rainbows. Many people are facing real hardships, and for some, there seems to be no relief in sight. But look closely, and you can probably find the silver lining. Acknowledging the upside of student debt can help combat feelings of hopelessness and even lower stress. Always try to keep in mind that as you change your attitude about your student loans, and adopt a more positive approach, it can make this burden easier to bear.