The student loan crisis is often a woman's problem.
Overall, Americans owe over $1.7 trillion in federal student loan debt and women hold two-thirds of it. But with women with a bachelor's degree earning only 70 cents for every $1 men earned, student loan repayment is a bigger struggle for females.
That disparity will come in greater focus as borrowers begin loan repayments next month after a three-year pandemic forbearance pause while inflation remains a concern on budgets.
"Women hold a tremendous amount of student debt in part because they're enrolled more in college to have higher credentials in order to be more gainfully employed and to earn an acceptable salary," Gloria Blackwell, CEO of the American Association of University Women (AAUW), told Yahoo Finance Live (video above). "They've taken on more degrees, more debt, and they are earning less. And unfortunately, it takes them longer to pay off that debt. All of those things colliding are the reasons why women have a substantial portion of that student loan debt and it really is untenable at this point."
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By 2027, 40% of all jobs are expected to require a bachelor or masters degree, which is why 74% of female students plan to continue their education beyond a bachelor degree, according to AAUW research.
Half of all households are headed by women, even among married households, and 46.1% of women are the main breadwinner, according to an Urban Institute study.
Even though women are more likely to have a college degree than men, it doesn’t necessarily translate to financial security, especially for women of color. A Government Accountability Office (GAO) study found that white women earn 78 cents for every $1 men earn. That disparity increases to 63 cents for Black women and 58 cents for Latinx women.
Additionally, women are often the ones who provide unpaid caregiving to children and adults in their lives, to the detriment of their finances. A woman loses on average $237,000 in lifetime earnings because of caregiving, according to a research report this year from the Urban Institute.
A LIMRA survey last year found that many caregivers took on more debt (21%), spent their emergency savings (21%), halted saving for future emergencies (17%), withdrew money from a retirement account for non-retirement reasons (13%), or stopped saving for retirement (12%).
"The collision of the gender pay gap, racial pay gap, and the motherhood penalty will have a devastating impact on women's economic security," Blackwell said. "Women of color are earning less meaning that they're already behind the eight ball when it comes to meeting basic expenses. When the loan repayment pause ends, it has an impact on their ability to pay for childcare, saving for retirement, and paying for medical expenses."