Women are the first victims of the student debt crisis

Women are the first victims of the student debt crisis
Women are the first victims of the student debt crisis

The student loan crisis is often a women’s issue.

Overall, Americans owe more than $1.7 trillion in federal student loans and women hold two-thirds of that. But because women with bachelor’s degrees earn only 70 cents for every dollar men earn, paying off student loans is a greater challenge for women.

That disparity will become even more visible as borrowers begin repaying their loans next month after a three-year pandemic forbearance pause while inflation remains a concern for budgets.

“Women carry enormous student debt, in part because more of them are enrolling in college to earn higher degrees, get better-paying jobs, and earn livable wages,” Gloria Blackwell, CEO of the American Association of University Women (American Association of University Women). AAUW), told Yahoo Finance Live (video above). “They’ve gotten more degrees, more debt, and they’re earning less. And unfortunately, it’s taking them longer to pay off that debt. All of these things colliding are the reasons why women have a substantial share of this student debt. and it’s really unsustainable at this point.”

Read more: Student loan problems? Here’s how to file a complaint with the Ministry of Education

By 2027, 40% of all jobs are expected to require a bachelor’s or master’s degree, which is why 74% of female students plan to continue their education beyond a bachelor’s degree, according to an AAUW study.

Half of all households are headed by women, even among married households, and 46.1 percent of women are the primary breadwinners, according to an Urban Institute study.

Even though women are more likely than men to have a college degree, this does not necessarily translate into financial security, especially for women of color. A Government Accountability Office (GAO) study found that white women earn 78 cents for every dollar earned by men. This disparity amounts to 63 cents for Black women and 58 cents for Latina women.

Additionally, it is often women who provide unpaid care to the children and adults in their lives, to the detriment of their finances. The average woman loses $237,000 in income over her lifetime because of her care, according to a research report released this year by the Urban Institute.

A LIMRA survey last year found that many caregivers were taking on more debt (21%), spending their emergency savings (21%), stopping saving for future emergencies (17%), withdrawing money in a retirement account for reasons other than retirement (13). %), or have stopped saving for retirement (12%).

“The collision between the gender wage gap, the racial wage gap and the motherhood penalty will have a devastating impact on women’s economic security,” Blackwell said. “Women of color earn less, which means they are already behind when it comes to meeting basic expenses. When the loan payment pause ends, it impacts their ability to pay for childcare, save for retirement, and pay for medical expenses.”

SWEET BRIAR, VA - MAY 16: Graduates congratulate each other during the final commencement ceremony at Sweet Briar College, a women's liberal arts college in Sweet Briar, Virginia, on Saturday, May 16, 2015. The school is closing its doors this summer due to a lack of funding.  (Photo by Jabin Botsford/The Washington Post via Getty Images)

Women with a bachelor’s degree earn about 70 cents for every dollar a man earns, the data shows. (Credit: Jabin Botsford/The Washington Post via Getty Images)

Advocacy is another way to help women facing the student debt crisis.

For example, pay transparency laws that have come into effect in recent years can help narrow the pay gap. A study last year found that the gender pay gap was reduced by up to 45% in transparent organizations compared to those that did not disclose their salaries.

Another way to “level the playing field would be to pay women what they are worth, which means ending the pay gap by ensuring workplaces are fair is an incredible solution,” Blackwell said .

“On the advocacy side, we seek to ensure that policies around wage gap laws are enforced and that we move forward by advancing the Paycheck Fairness Act, which will strengthen the protections put forward in the Equal Pay Act.”

Read more: Can you change your student loan repayment plan?

Ronda is a senior personal finance reporter for Yahoo Finance and an attorney with experience in law, insurance, education and government. Follow her on Twitter @writesronda.

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