How Student Loans Exacerbate the Gender Wage Gap

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Over the past decade, women have been outpacing their male counterparts when it comes to obtaining a college degree. And while it’s an impressive trend to see, the costs of obtaining higher education affect women more than men. According to the American Association of University Women, female graduates now hold two-thirds of the outstanding student loan debt in the United States. This disparity means that women start their careers at a disadvantage, and is further exacerbated by the gender wage gap, with women still earning less than men for comparable work. When women owe more and make less, they are set on an intrinsically more difficult path when it comes to personal finance. Fortunately, there are actionable steps they can take to help ease the burden and potentially make student loan repayment more manageable.

The Gender Wage Gap and Student Debt

The wage gap between men and women in the workplace is often chalked up to the fact that women are more likely to work in low-paying jobs (that sometimes require higher degrees, such as healthcare and teaching), but another major contributor is discrimination and bias in the workplace. Women, and especially BIPOC women, are less likely to be promoted to higher-paying positions. Women are also more likely to take time off from work to care for children or aging parents. A recent study from the Department of Labor found that this type of unpaid caregiving can cost women nearly $300,000 in lost pay over the span of their career. These types of leaves often delay promotions and pay raises, making it harder to keep up with loan payments. When you combine this discrimination with the burden of student loan debt, it’s easy to see why women are struggling financially.

Student Loan Forgiveness

One of the most attractive options in the student debt landscape is student loan forgiveness. Forgiveness and cancellation can be achieved through federal programs that help with repayment strategies as well as balance forgiveness, and private programs that may be available through certain professional organizations or state-funded groups. Some loan forgiveness programs are geared toward female-dominated industries, such as teaching and nursing. It’s important to research all available options to see if you qualify for any of them and apply early.

Student Loan Repayment

In addition, many employers offer student loan repayment benefits that can help you pay off your debt quicker. A percentage of each monthly payment is deducted from your paycheck and paid directly to the loan servicer on your behalf. It’s worth asking if your employer offers this type of benefit or a similar program when you’re looking for a job.

The government also offers repayment strategies tied to student loan forgiveness programs, such as income-driven repayment, which calculates your monthly payment amount based on your income and family size, ensuring you’ll never owe more than you can afford.

Student Loan Refinancing

Finally, refinancing your student loans can be a great way to lower your payments and pay off debt more quickly, especially if you have private student loans and are ineligible for federal programs. Refinancing allows you to consolidate all of your loans into one loan with a new interest rate and different payment terms. This could help you save money by reducing the amount of interest you have to pay on your loans (depending on market rates) or lowering your monthly payments during challenging times.

In Summary

The gender wage gap is a pervasive problem in our society. Women with student loan debt not only have lower earnings than men, but they also have larger debts to repay. This puts them at a significant disadvantage when it comes to financial security and stability and makes student debt management a paramount concern.