Student Loans And The Gender Pay Gap

Student Loans And The Gender Pay Gap – When they leave the stage, they will not only have an education but, in most cases, a mountain of bills, joining the more than 40 million Americans who collectively owe $1.76 trillion in student debt, according to the Education Data Initiative , a non-profit organization.

Corazon Eaton of Columbus, Ohio is among that group. The 35-year-old graduated with a master’s degree in public health in 2014, earning a diploma that cost her more than $100,000 in student loans.

Student Loans And The Gender Pay Gap

“The only thing I was really taught as an immigrant in the United States is the importance of an education and that I needed to obtain it to advance and further my professional and personal life,” Eaton, who was born in Kenya, told “Good Morning America.” “And that’s what I did.”

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Over the next decade, Eaton said, the interest on her loans grew, eventually adding up to $30,000 on top of what she owed at graduation.

After graduating, Corazon Eaton said she avoided tackling her student debt, and it wasn’t until several years later that she realized she didn’t want to live under the burden of debt.

“Thinking through the long-term impact of this was not something I was aware of when I took out all these student loans,” she said. “Maybe I would have done things differently.”

In less than two decades, student debt in the United States has risen 144%, growing from just over $640 billion in 2007 to more than $1.5 trillion today, according to a report released last year by the Bipartisan Policy Center, a Washington, D.C. -based think tank.

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The increase, experts say, can be attributed to many factors, including policy decisions that made student loans both easier to obtain and harder to repay, economic recessions and the shift in the payment burden for families.

Another factor is the rising cost of college — up 103% over the past three decades — compared to a much slower increase in household income, which rose just 14% over the same period, according to the American Association of University Women, a non-profit organization with a focus on promoting gender equality.

“We’ve seen a shift in who pays for college,” Fenaba R. Addo, an associate professor of public policy at the University of North Carolina-Chapel Hill who studies student debt and wealth inequality, told “GMA.” “That burden has shifted to families facing stagnant wages and incomes over time, and loans became the solution.”

The bulk of student loan debt in the United States has fallen on women, who today hold nearly two-thirds of all outstanding student debt, an amount totaling more than $900 billion, according to the American Association of University Women.

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More female students take out student loans when they come to university than men. After graduation, a female graduate owes an average of nearly $22,000 in debt, while a male graduate owes an average of about $18,000, the group found.

“It’s a significant burden on women when it comes to the way it affects every aspect of their careers and their lives going forward,” Gloria Blackwell, the group’s executive director, told “GMA.”

One reason for the gap is that in addition to taking out more student loans, women are outpacing men when it comes to earning both their four-year college degrees and their master’s degrees, according to the Pew Research Center and the National Center for Education Statistics.

“If you take out a student loan for your undergraduate degree and you take out a student loan for your master’s degree, the combination of those two will put you in a space where you’re going to owe more,” said Nicole Smith, research professor and chief economist at Georgetown University Center on Education and the Workforce. “So women are disproportionately holders of more education and therefore more likely to have greater amounts of debt associated with having obtained it.”

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Experts also pointed to for-profit colleges as a cause of rising student debt for women, who make up 63% of the for-profit student population, according to the Center for Analysis of Postsecondary Education and Employment.

For-profit colleges are designed with flexibility in mind and also have higher fees and tuition than both community colleges and public universities, according to the organization.

“The way they’re modeled, the flexibility of being able to work and also go to school, has overwhelmingly attracted women, especially black women who didn’t complete their educations the first time or didn’t go straight out of high school or are looking to change careers,” Addo said. “They are a means for women not only to return to college and get their degrees, but to do so at a high cost.”

Women are also more affected by student debt if they have children, as they can borrow more to ease the burden of other household expenses, such as child care. Women with children may also lack the ability to work while in school, and having a child may also extend the time they are in college, Blackwell said.

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Black women are the most likely of any gender group to have student loans. According to the Census Bureau, about 1 in 4 black women report having some degree of student debt.

Black women graduate with an average of $37,558 in student debt, according to American Association of University Women research.

“Black women take on more debt than anyone else, and therefore graduate with more student loan debt than any other category,” Blackwell said. “It’s a combination of racism and sexism and the intersecting pieces that put a disproportionate burden on black women.”

As black and other minority women attend college, they are often forced to take out more student loans because of what Blackwell calls the racial wealth gap. They are also more likely to be first-generation university students, which may mean that they have less knowledge about the financial aid system than their peers.

The Gender Wage Gap

“Knowing that the typical white family has at least eight times the wealth of a black family and five times that of a Latino family, it really shows that the student debt crisis is really about the racial wealth gap,” Blackwell said. “They have less support from their families. There’s no generational wealth that’s there to pick up, whatever the difference.”

Kristin McGuire, 40, who is black, said she had to borrow more than $20,000 to attend a four-year public college in California. In the years since, she said her debt was compounded by forbearance programs that increased the amount of money she had to repay to over $50,000.

Kristin McGuire said she is still paying back her student debt 17 years after graduating with a degree in public administration.

“After college, I wasn’t really sure how I was going to pay it back,” McGuire told “GMA.” “I think one of the bigger problems with our student debt system is that we’re allowing 18-year-olds to take out these loans and not really have a clear understanding of how they’re going to pay them back.”

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While women graduate with an average of about $4,000 more in student loan debt than men, the burden for women grows dramatically in the years after college as they try to repay it, experts say.

According to the National Women’s Law Center (NWLC), a policy-focused organization focused on gender justice, women across all races are also paid approximately 83 cents for every dollar paid to men across the same groups. With less income, they are unable to pay off as much debt each month, leading to higher interest rates and increased debt.

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For women of color, the pay gap is even worse, with black women earning 64 cents on the dollar and Latinas earning just 57 cents. Among Asian American, Native Hawaiian and Pacific Islander women, the gap varies by group, with some earning as little as 52 cents for every dollar paid to white, non-Hispanic men.

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That loss of pay adds up to hundreds of thousands of dollars over a career, the National Women’s Law Center said.

Since women, especially black women, earn less money in their careers, they have less money to pay back their student loans, a confluence Smith described as a “perfect storm.”

“They’re making less money. They need to borrow more. They’re struggling significantly with repayment. You have the gender pay gap,” Smith told “GMA.” “You really have a perfect storm where the experience of black women with student loans is that they end up with the highest percentage of student loan debt, eight years after, 10 years after graduation.”

In addition to the gender pay gap, many women are also affected by the care gap, often taking lower paying jobs that offer flexibility to care for children or other family members. On average, women who are mothers earn 70 cents for every dollar paid to fathers, according to the American Association of University Women.

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Smith said women are also disproportionately in careers that require high levels of education, such as teaching and nursing,