Protecting Our Most Vulnerable Borrowers: Helping the Depressed Deal with Student Debt Stress | American Student Assistance

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Protecting Our Most Vulnerable Borrowers: Helping the Depressed Deal with Student Debt Stress

Mar 31st, 2016

At American Student Assistance and our SALT financial education program, we want to eliminate finance as a barrier to education, to free everyone to unlock the potential of college and the dreams education enables. In fact, we want all students to see the economic boost a college degree should bring, rather than an overall loss of lifetime wealth because they chose to take on student debt. As we’ve written in the past, we want a society with “zero student loan struggles.”

To make that vision a reality, we know that every higher education consumer deserves a fair and transparent process. But there are specific constituencies of vulnerable education loan borrowers who require extra protections. For example, we recently wrote in The Hill and held a Washington, DC policy forum on the important topic of student debt and our military service members.

Another vulnerable population is the growing number of older Americans experiencing economic insecurity as a result of their student debt. It’s also well documented that low-income, first generation students face myriad education debt challenges.

But one vulnerable population rarely mentioned is the mentally ill. For those suffering from mental illness, depression or thoughts of suicide, student debt isn’t just a crushing burden; it can be a matter of life or death.

According to a recent GoodCall piece, “The age group for traditional college students is where a lot of conditions come to light …The stresses, physically and mentally, of transitioning to adulthood often push people into developing these chronic conditions.” The article goes on to quote statistics from The National Alliance on Mental Illness that “the onset of 50 percent of chronic cases of mental illness occur by age 14 and 75 percent by age 24,” as well as a Wisconsin HOPE Lab report that found 50 percent of community college students have recently faced a problem relating to their mental health. Additionally, a study by the RAND Corporation among California college students found that 19 percent of students reported experiencing “serious psychological distress” in the past 30 days.

Adding to the stress of college life is student debt. Recent data points to some improvement in student loan repayment trends, but the sheer number of struggling borrowers is still staggering: About one in five student loan borrowers in repayment are at least 31 days behind – and that doesn’t begin to include the millions more borrowers who are temporarily pausing payment due to unemployment or economic hardship. As a result, at our own organization and anecdotally, we’ve seen an alarming trend of suicide letters and phone calls from borrowers.

As one of our student debt counselors relates, “A few months back I received a call from a borrower who wanted to fix a delinquency on her loan. She was in hysterics, crying the entire phone call. It is not uncommon to speak with someone who is crying and upset, but this was to an extent that I had not heard before.

“Throughout the call the borrower made comments about not wanting to hurt herself as I was trying to go over her options. I did the best I could to stay focused on the loan and to help her with the delinquency, figuring that was the best thing I could do for her.

“Eventually we progressed to a three-way conference call with her student loan servicer to apply for a forbearance to fix the delinquency. That representative took over the call, but I stayed on the line. At this point the call got more concerning, as her ‘not wanting to hurt myself’ comments evolved into her wanting to hurt herself when the call was over. I could tell the representative with the servicer sort of froze, as did I. Then I came back on the call and asked the borrower if she needed to speak with someone. She said yes, and I got her the number to the suicide prevention line. Happily, she did call us back weeks later to confirm she was all right and that she received the forbearance she needed.”

Stories like this persuaded our organization’s leadership to immediately put in place resources and training for our staff. We have implemented an employee training course that gives our front-line counselors the education they need to deal with distraught borrowers. We surveyed best practices of selected agencies to develop guidance for some 100 of our Borrower Advocates and Counselors. We’ve put together suggested scripts, tips and a list of national and state mental health resources, as well as steps for documenting the call and required follow-up. Additionally, many of our staff have already completed an on-line suicide prevention module and it is expected that all associates will complete this training in the near future.

These efforts don’t pretend to make our associates experts in dealing with these emotionally charged situations. But they do at least raise associates’ awareness level and send the message that, when a borrower threatens bodily harm to themselves, we take these threats seriously and place a high value on the well-being of both our borrowers and associates.