Why student loan debt for women is concerning.
Many people dream of attending college. There’s also a direct connection between attending college and earning a higher salary. However, for millions of Americans, college is only affordable with the help of student loans, which can be challenging to pay off.
There were 45 million borrowers with student loan debt in 2021 who collectively owe about $1.7 trillion, according to Forbes. This puts student loan debt as the second highest consumer debt category in the U.S., higher than debt for both credit cards and auto loans but less than mortgage debt.
For women, student loan debt is overwhelming.
Student loan debt is making it practically impossible for some women to afford basic living expenses after college. Women hold an average of $31,276 in student loan debt, requiring them to pay a monthly loan payment of $307 after graduation, according to the AAUW. Women who earn a bachelor’s degree can expect to earn an average salary of $35,338, making it difficult to meet their student loan obligations. According to the same report from the AAUW, one year after college, women spend an average of $920 a month on housing, $396 on a car loan, and $520 on childcare (if they have children). When you add utilities, medical expenses, food, and other basic expenses, it can be very difficult for a woman to make ends meet if she has a student loan.
The gender gap is large when it comes to student loan debt.
Women currently hold about two thirds of U.S. student loan debt, but recent graduates can expect to only earn 81% of what men can anticipate earning. According to Pew Research, the gender pay gap has remained relatively stable in the U.S. over the past 15 years. In 2020, women earned 84% of what men earned, according to a Pew Research Center analysis of median hourly earnings of both full- and part-time workers. Based on these numbers, it would take a woman an additional 42 days of work to earn what a man did in 2020.
Women with a bachelor’s degree make 26% less than male counterparts on average. Due to this, it takes women two years longer than men to pay back loans on average.
Some believe that childbearing is behind the gender wage gap. According to one study, childbearing accounts for 80% of the gender wage gap.
What can you do to reduce student loan debt?
Living paycheck to paycheck can make it challenging to pay down student loan debt. However, the longer it takes to pay off a loan, the more you will pay overall and the harder it will be to save money for other expenses and retirement. Creating a budget can help you eliminate unnecessary expenses and reduce discretionary spending. By adding student debt repayment as a line item in your budget, you can set aside dedicated funds to paying off your debt. Lifestyle changes can also help you pay down debt faster.
Many women aren’t earning enough to pay off student loans, and these payments are making it difficult to cover even basic necessities. Women earn 84% of what men earn, which contributes to why it takes them longer to pay back loans. Many women also have to take on the financial burden of childcare, which makes it challenging to pay off loans.
Student loans can be expensive and difficult to pay off. A personal loan could provide financial relief if you can secure a better rate than your student loans. You can check your rate for a personal loan at Uprova.com without impacting your FICO credit score. Check your rate today.