How Covid Could Make Student Debt A Bigger Problem For Women
Courtesy of the American Association of University Women
CNBC: Why do women borrow more on student loans than men?
Kim Churches: Women earn less than men and may not have as much to fund their education. Some receive less help from their families and others have to cover the cost of care. We know that women are more likely than men to attend for-profit colleges and universities, where debt levels are higher, so this is also a factor.
CNBC: How do we know that women struggle more than men to pay off student debt?
KC: Difficulty in repaying student loans translates into default rates, which are higher for women than for men, and much higher for black and Hispanic borrowers than for white and Asian borrowers. We also found that 34% of all black women and 57% of black women who paid off their student loans said they were unable to meet their basic expenses.
CNBC: Why do black women take on more student debt and what issues do they have with repayment?
KC: The racial wealth gap is a big factor here. The median wealth of white households is 20 times that of black households, so black families have much less to contribute to college education. On top of that, there is the gender pay gap. Black women only earn 63 cents for every dollar earned by a white man, which translates into less money for education and a greater challenge in meeting student loan obligations.
CNBC: How do you think the pandemic will affect female student loan borrowers?
KC: We expect to see a sharp increase in the number of women unable to meet their student loan obligations. Most of the layoffs we’ve seen have been in female dominated fields, and many more women have left the workforce and are still taking on childcare and home schooling responsibilities. If we do not tackle the student debt crisis, we will see an even greater setback in the progress of women in the years to come.
CNBC: Does AAUW think canceling student debt is a good idea?
Yes, we need student loan cancellation, and we actively support various federal and state debt cancellation proposals. But debt cancellation alone is not the solution. A generation ago, a year of college cost 22% of median household income. That number has jumped to 43% today. The cost of higher education has really gotten out of hand.