What is the key to reducing student loan stress?

It is estimated that a quarter of American adults currently have student loans to pay off and most do not have the financial skills to successfully manage debt. For the average student in the 2016 class, the student loan debt is $ 37,172. The average debt of Missouri State graduates is $ 21,884.

In a new study, Lu Fan, an assistant professor of personal financial planning at the University of Missouri, found that borrowers do not have the appropriate education to manage student debt. She suggests that more should be done to educate borrowers about debt management as well as about the various repayment options they might have.

“Most borrowers, 55 percent, reported being worried about their student loans; however, only 30 percent of borrowers said they had received financial education on paying off student loans, ”Fans said. “In addition, only 40 percent of borrowers reported having a financial impact from their parents. Given the number of people who need student loans to attend college, we need to do better in educating borrowers. “

Using the 2015 National Financial Feasibility Study dataset, University of Georgia professor Fan and Sven Chterey found that student loan debt puts borrowers under stress. The researchers looked at more than 2,600 data set responses, focusing on respondents who had a student loan, aged 24-65, were no longer students, were employed, and were key decision makers in their household.

Researchers found that women were less likely to be late with student loan payments but more likely to be concerned about their student loans. Men were less concerned about their debt and were more likely to file late payments. They also found that people with non-college loans were more worried about paying off loans than those with degrees.

Fans believe that borrowers do not get the information they need to make the best financial decisions, and that policymakers and lenders should do more to educate borrowers.

“I hope policymakers use this information to develop financial education programs,” she said. “Better educational resources designed for specific audiences – parents, young adults, women and households that have experienced income losses – will generate more educated borrowers.”

Have less financial stress with money

Money management can be stressful for most people. A recent survey by the American Psychological Association showed that 72% of Brazilians say they are very stressed because the cost of money is increasing every month, and almost a quarter of people say that their stress level is extreme in relation to future expenses.

Currently, ongoing financial problems have led to significant stress in the lives of Brazilian citizens. The best solution is to live modestly, no doubt this can fix many of these problems.

And when emergencies arise, this stress can get worse. A 2014 Central Bank report showed that 47% of Brazilians were unable to cover the financial need of $ 1,500. This is a serious number. By learning to spend less than you earn, you will be able to create savings that cover any possible emergency, and also eliminate the likelihood of being cheated with fraudulent loans.

Building Financial Confidence

When you are able to live below your costs and expenses, you can begin to see your savings grow, as this creates financial confidence. Not to anything better than taking control of your money, instead of feeling as though he had control over you. By gaining that confidence, learning to trust yourself and your financial decisions, you will make smarter choices.

Building financial confidence comes from educating yourself on better ways to manage finances and then applying that knowledge. Learning to live within the limits of income and actually doing this, will help you on your way to financial freedom and not fall into scams.