(Un)Happy Graduation: Student Loan Debt and the Gender Wage Gap

By Amanda Reed, Communications Intern

College is a busy time. As a student preoccupied with class, work, interning and campus activities, I have put off thinking about my student loan debt. I have tried not to dwell on the cost of my tuition, housing and meal plan while saving money wherever I could but as I approach graduation, I know I will soon have to revisit these expenses when the loans come due. Most of my peers are in the same situation — some owing more (or less) depending on individual circumstances. Those of us who are female may face an added challenge: the gender pay gap.

The American Association of University Women (AAUW) recently published a report focusing on the effects of the pay gap on women working one year after college graduation. According to the report, “Graduating to a Pay Gap”, women earned average salaries of $35,000 compared to the $43,000 earned by men.

Pay inequality adds weight to the burden women bear of post-graduation debt. AAUW’s findings tell us that women are more likely to take out loans; among 2007-2008 graduates, 68 percent of women borrowed money for college compared to 63 percent of men. The number of women with high amounts of student loan debt has increased — from 38 to 53 percent from 2001 to 2009. In 2009, 53 percent of full-time female workers also devoted more than they could reasonably afford to student loan repayments one year after graduation compared to 39 percent of full-time male workers. Some claim women’s choices in college and major are to blame for the struggle they face. This argument fails to consider that these choices may be constrained by factors such as gender expectations and access to male-dominated STEM (Science, Technology, Engineering and Mathematics) fields. Although these factors were partially related to the issue, they did not entirely explain it; for example, women working in higher-paying fields still earned less than male colleagues.

Legislative action can help women receive the loan assistance and fair pay they deserve. In the U.S., half of employers can legally fire workers for discussing salary on the job; this hinders female employees from asking about paycheck disparities. A provision of the Paycheck Fairness Act would eliminate paycheck secrecy and employer retaliation. Through the Smarter Borrowing Act and the Know Before You Owe Act, high school students would receive more information on student loans before they borrow. The Fairness for Struggling Students Act would permit private student loans to be discharged into bankruptcy. The Student Loan Fairness Act would forgive a college graduate’s student debt after 10 years of payments at 10 percent of their discretionary income. The Bank on Student Loan Fairness Act, introduced by Senator Elizabeth Warren this week, would set federal subsidized student loan (Stafford loan) rates to the interest rate given to banks on loans made by the Federal Reserve. Students would then have access to the same low rates offered to the big banks.

The pay gap and growing student loan debt are more than small hindrances for women. They discourage women from pursuing degrees and prevent women from advancing in the workplace. Student loan debt and the pay gap also send the message that women’s hard work, whether in the classroom or the office, is not good enough. Many of us have been raised with the opposite message — a degree is meant to make our lives easier, pave the way to our dream jobs and lead to a financially-stable future. Through loan and paycheck fairness, college can become a better investment for women.

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