Veterans Say Debt Aggravates PTSD; the Lending Industry Has an Opportunity to Act

More than 90% of veterans in a survey reported that debt makes their symptoms of PTSD worse, and 37% say they face ongoing stress over paying bills, according to a National Debt Relief study.

The study of 1,000 veterans over 21 who are no longer in service paints the picture of a financial underside all too often neglected in discussions of care for veterans. While post-traumatic stress is a documented problem, financial strain as a precipitant is under appreciated.

Subprime lenders, credit counselors, and debt relief organizations are in a position to assist this demographic with information and financial products to help veterans manage debt and improve their financial stability.

The reality is that debt is more than merely an economic problem to a veteran readapting to civilian life — it’s a matter of health. The psychological impact of war does not stop when a veteran returns home. The next fight is often fought with bills for many of them.

The research also discovered that 90% of the vets have some form of debt, and 72% of veterans have credit card debt. One-third of those with credit card debt owe $10,000 or more. Thirty percent have medical debt, and 23% don’t have any savings.

Among the younger vets, 44% have medical debt, and 77% of millennial and Gen Z veterans are still paying off debt incurred during active duty.

More than half work said they more hours than they prefer to pay debt, and 51% are constantly stressed about bills. In all, 78% of the veterans surveyed said they are anxious about their job or financial condition in the modern economy.

“For many veterans, even small setbacks can become overwhelming, especially when already carrying the invisible wounds of service,” said Natalia Brown, Chief Compliance and Consumer Affairs Officer for National Debt Relief.

The research shows more than statistics. A quarter of the vets indicated their debt has caused financial stress that makes them delay accessing mental healthcare. A further 30% have avoided social situations because of anxiety caused by debt.

These are indicators of a feedback loop in which debt exacerbates social isolation, intensifies symptoms, and reduces access to care.

Compounding the problem is the reality that numerous vets are reluctant or ashamed to seek assistance. The report cites a statistic of 67% of respondents who said they did not pursue financial aid because they did not have any idea how to proceed. This presents an opportunity for the private sector to pick up the slack.

Financial service providers, credit counselors and other industry players have an opportunity to provide products and services to veterans struggling to build or rebuild their financial situation.

• Product design: Veterans could be helped by having short-term installment loans with flexibility in repayment terms or credit-builder products linked to financial coaching. Lenders should consider products with military-specific hardship clauses or deferment features.
  
• Partnerships: Partnering with groups such as Operation Homefront or the Wounded Warrior Project will aid nonprime lenders in reaching out to deserving veterans. Partnerships also bring credibility and trust.
  
• Veteran outreach: Companies interested in tapping into this audience will want to revisit their message. Their marketing efforts should demonstrate familiarity with the military experience and promote the success stories of existing veteran clients.
  
• Integrated support: Coupling debt relief with mental health care or budgeting assistance might yield a comprehensive solution to account for the interconnection between money and mental wellness.

Veterans account for approximately 6% of the American population but bear disproportionately high rates of homelessness, joblessness, and now apparently debt-induced mental distress. Businesses that make the leap now might gain a client base, but they might gain tangible influence as well.

In a nation full of yellow ribbons and Memorial Day parades, this research asks all to look inward and consider what supportive action looks like. Support is more than waving flags; it means understanding the systemic issues confronting vets and building systems to solve them.

Debt relief plans, when done thoughtfully and with dignity, are capable of providing more than fiscal recovery. They are capable of providing healing and hope and a way out. For nonprime providers seeking to differentiate and do good, veterans are a cause to pursue.

That assistance can begin immediately. And the financial services sector is best positioned to provide it.