The spotlight that student loans have enjoyed in the recent years has overlooked a key element: the burden of student debt in the United States is disproportionately carried by women. Senator Elizabeth Warren and presidential candidate Hillary Clinton are both well known for their recent advocacy for relieving the burden of borrowing for college students. Mrs. Clinton’s student loan plan has received widespread attention from the media, which has meticulously examined it to applaud or criticize its proposals. Neither Hillary Clinton nor Elizabeth Warren, however, have addressed the fact that females are more likely than males to graduate college with debt. This burden then increases when women enter the workforce and earn less than men do. Women’s debt burdens are a crucial point to address for anyone who wants to close the gender wage gap and must not be overlooked in our discussion of student debt as we move closer to 2016.
In 1993, women were equally likely as males to graduate with debt. In the past two decades the number of women graduating with loans has grown relative to the number of men graduating with loans. Today 68 percent of female graduates are leaving school with student debt, compared to 63 percent of men. A five percentage point difference in the likelihood of borrowing may seem small but it is one that calls for a closer look, not only because it is significant but also because there are important reasons for and implications of such a difference.
The story of women’s loan burdens begins on a positive note: the percentage of women who earn bachelor’s degrees relative to men has continued to grow since the 1980’s. Today, there are more female than male graduates across all races in the United States. The female advantage in college enrollment and completion rates is largest in low-income families, according to a study done in 2006 by sociologists Claudia Buchmann and Thomas A. DiPrete in 2006. Women make up a larger number of first generation students than men do. A 2005 study on first generation college students by the Higher Education Research Institute at UCLA showed that 16.9 percent of first generation students are female, while 14.7 percent are male. This difference is larger in private universities, where 60.2 percent of first generation students are female. The positive side of this story is that more women are going to college and more first generation women are attending high-ranked institutions like Wellesley that can open more doors after graduation. The alarming side of the story is that loans then deter women from taking an advantage of post-graduation opportunities.
When women graduate from college, they make less money than males do, so they have less with which to pay back their loans. Programs like President Obama’s Pay as You Earn, which program caps monthly payments after graduation at 10 percent of the borrower’s income, help ease loan burdens on debtors and levels the playing field. But not all debtors are not eligible for the plan. The fact remains that if men earn more than women paying back student loans will be less of a burden for them and might happen faster than it does for women.
The burden of debt impacts every decision that women make after college: getting more degrees, creating an emergency fund, investing in a 401k or saving for a house. Because women tend to earn less than males, loans pose a bigger deterrent to women’s careers than to men’s careers.
Obama recently released a new College Scorecard that lets users rate how good of an investment a college is. Although the federal government’s data provided on the site have a lot of limitations, it lets us better understand differences across colleges in important ways. For instance, the site helps prospective students understand how much each school’s graduates earn, how much they pay to attend, how much debt they graduate with and what percentage of a school’s students can pay back their loans. NPR’s Planet Money team created three different rankings that assess how much students are earning and paying back relative to what they paid for school. It comes as no surprise that there isn’t a single women’s college in the top 50 schools of NPR’s rankings. These rankings don’t take differences across gender into account and therefore fail to account for the fact that statistically, women earn less than men.
If we compare Wellesley to other women’s colleges, the story is much different. Wellesley ranks second only after Barnard on student’s wages after graduation. More importantly, amongst the five remaining colleges of the Seven Sisters schools, the proportion of Wellesley students who graduate with loans is considerably lower than any other sister school. 25 percent of Wellesley students graduate with student debt, a much lower fraction of students than Smith (54 percent), Bryn Mawr (47 percent), Mount Holyoke (45 percent), and Barnard (32 percent).
As a women’s college where 25 percent of us will graduate with debt and all of us will enter a job market where our male co-workers are more likely to earn more than we do, we need to pay closer attention to figures like Warren and Clinton who want to ease students’ debt burdens. The student debt burden today has been phrased by the media as a “student debt crisis.” In the period between 1993 and 2012, the typical amount owed by students at graduation more than doubled. As student debt continues to make headlines and political figures debate about the issue, it is important to keep in mind that it is a crisis that hits women the hardest.
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