Is Student Loan Debt a Women’s Issue?

Americans today owe nearly $1.45 trillion in student loan debt, spread among 44 million borrowers. National anxieties about burgeoning debt continue to grow, especially as federal loan forgiveness and subsidy programs face an uncertain future. But a report released this year by the American Association of University Women (AAUW) also suggests that the student loan crisis is a women’s issue. For young women considering careers in public service, these findings on the gender disparity in student loan debt have important implications for women’s ability to enter and succeed in government.

By many measures, women have succeeded in narrowing the long-standing achievement gap in higher education. Women currently represent slightly more than half of enrolled college students across the country, at 55 percent, and are more likely to graduate college than their male peers. However, this surface-level gender parity in higher education has a significant, hidden cost.

The AAUW’s “Deeper in Debt” report found that women disproportionately hold two-thirds of the country’s outstanding student loan debt — approximately $833 billion, compared to $477 billion for men. This figure also likely underestimates the amount of debt held by women, because the report doesn’t capture women who enroll but don’t complete their degree.

So, why are women hit hardest by the student loan debt crisis?

Women are more likely to take on debt, and take on larger loans. In a given year, 44 percent of female undergraduates take out student loans, as compared to 39 percent of male students. On average, women also take on more debt than men at almost every degree level and type, and across institutions. Year-to-year, women’s loan balances are about 14 percent greater than those of comparably educated men.

With race factored in, women of color fare even worse. Black women take on more student debt than do members of any other demographic group. About a third of black women who earn a bachelor’s degree leave with more than $40,000 in loan debt, versus just 16 percent of Latina women, 10 percent of white women and 8 percent of Asian American women.

In addition to their lower earnings, women also accumulate less wealth than men — a gap that is even more glaring for black and Latina women (many of whom actually have a negative net worth). The college debt inequity is further compounded by the persisting gender pay gap. Women of all races and ethnicities not only have larger student loans, but have less disposable income with which to repay these loans after graduation. According to the report, college-educated women who worked full time in 2016 earned 26 percent less than men with a bachelor’s degree who worked full time — and this gap only continues to widen over time.

“Women’s success in higher education is reducing the size of the gender pay gap, but student debt is making it harder for women to get the leg up they need,” said Kevin Miller, a senior researcher at AAUW.

For example, about one-third of women report difficulty in meeting essential expenses (e.g. rent or mortgage payments and other living expenses) while paying off their loans, compared to just one-fourth of men. According to the AAUW report, a whopping 57 percent of African American women said they were unable to meet their essential expenses in the past year.

Single mothers, women with dependents and working women are also disproportionately targeted by predatory, for-profit colleges. Because these schools do not provide an adequate degree and have low completion rates, many of the women taking out student loans to attend these institutions face even greater risk of being overloaded with debt or defaulting on their loans.

“Though a college education remains the surest path to a middle-class life, evidence has begun to mount that student debt may be far more detrimental to financial futures than once thought, particularly for those with the highest levels of debt: students of color and students from low-income families,” said a recent report from Demos. Even with a degree, the burden of debt can make it more difficult for women to pursue further graduate education, pay for their larger share of medical expenses, purchase a home, start a family, create a new business or save for retirement.

Such findings have troubling implications. High levels of debt combined with lower incomes after graduation perpetuate inequality, hindering the opportunities for social mobility promised by higher education.

Researchers and policymakers have put forth a number of possible solutions to the student debt problem as a whole: expanding Pell Grants and other forms of financial aid, introducing more loan forgiveness programs or encouraging schools to provide resources like affordable on-campus child care to help nontraditional students successfully complete their degrees. The government can also mitigate the far-reaching consequences of the gender pay gap by passing legislation like the Paycheck Fairness Act and the Pay Equity for All Act.

But as long as women are paying a higher cost for “equal” opportunity, it is clear that the gender gap will continue to widen.

Find more information and FAQs on student loan debt, here.