For Women, Student Loan Debt Is an Even Bigger Crisis

As outstanding student loans surpass every other form of non-mortgage debt, it is becoming increasingly expensive to finance a college degree. Nearly 40 million people are saddled with student loan debt, totaling nearly $1.2 trillion in loans. Seventy-one percent of college seniors who graduated in 2012 have loan debt, averaging $30,000 per bachelor’s degree. Though debt is a crisis for all students, the burden falls even harder on women because of the persistent gender pay gap.

These staggering numbers are part of the reason why several senators introduced a bill last month to reform the borrowing system. Unfortunately blocked by Senate Republicans in a 56–38 procedural vote, the bill would have allowed student borrowers to refinance their debt at 2013-level interest rates. This option could help borrowers save a few thousand dollars over the life of their loans.

This legislative failure should be of particular concern to women graduates. AAUW’s 2012 report examined the staggering debt burden — specifically the percentage of earnings graduates devote to student loan payments. More women than men, 53 percent compared to 39 percent, are contributing more money to their student debt payments than a typical individual can reasonably afford. This means less money for rent, for health insurance, for groceries. It also means that women in particular will have fewer resources to save for retirement, buying a car, or investing in a home.

Chart showing percentages of women and men with high student debt.Why is this happening? Although women and men pay the same tuition for higher education — and tend to take out the same amount in loans — women are more burdened by their student loan debt after graduation. Just one year after graduation, women are paid on average 82 cents for every dollar their male counterparts are paid. And even after controlling for a number of contributing factors — chosen major, type of job, number of hours worked each week — our research boiled down to an apples-to-apples comparison and still found that a 7 percent wage gap persists.

In a recent press conference, Sen. Elizabeth Warren (D-MA) concluded that “it is a one-two punch. … Women take on big debts to go to college, but they have less money to pay off those debts.”

Student debt really is a women’s issue. While we work to bring down college costs, expand programs like Pell grants, and make financial aid more accessible, we also need to educate more graduates about programs like income-based and income-contingent loan repayment plans and public service loan forgiveness, and we have to encourage Congress to make student loan refinancing a reality. Women are outrageously being paid less from day one after college, but programs like these can help make the burden of student loan debt a little less overwhelming.

This post was written by AAUW Public Policy intern Beth Rader.


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