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The State Of Women And Student Loans

Natalia Lusinski

March 8, 2020

For International Women’s Day — and any day, really — it’s a great time to assess your student loan debt. In fact, according to a recent study, “Deeper in Debt: Women and Student Loans,” women have almost two-thirds of the outstanding student debt in the U.S. In early 2019, that equated to nearly $929 billion. Overall, the latest 2020 statistics state that 45 million borrowers owe around $1.56 trillion in student loan debt in the U.S. But why do women have more of the debt than men?

The report shows that women take on larger student loans. When they enter the workforce, due in part to the gender pay gap, they then have less income to pay them. For instance, one year after graduation, women college graduates working full-time are paid 18 percent less than their male counterparts, and the gap increases to 20 percent by four years after graduation, and so on. And the pay gap isn’t much better now. According to U.S. Census Bureau statistics from both 2018 and 2017, women’s median earnings are 82 percent that of men’s. So, in other words, paying off, say, $100,000 in student loan debt could take a female longer than a male in the same position if he’s making more money.

“With the persistent gender wage gap, women have less income to put toward their student loan debt, which means they are paying more money over a longer period of time,” Maggie Germano, CEO and founder of Maggie Germano Financial Coaching and host of the Money Circle podcast, tells Pillar. She says this is due to women surpassing men in college and graduate school attendance over the last couple of decades, and also because of women tending to borrow more money to pay for that education.

What To Do About The Extraneous Student Loan Debt

Of course, other elements, too, may play into your remaining student loan debt, from the type of job you have, your salary, and the current state of the job market to the type of loans you have, your cost of living, and your lifestyle choices. With this year’s International Women’s Day theme being #EachforEqual, there are other ways to get more on top of your student loan payments even if the gender pay gap is not in your favor, like by refinancing or consolidating your student loans

Germano says a key thing for women to do, however, is to always negotiate their salary, even when it’s your first job out of school. “Getting a new job is one of the best opportunities to increase your income, so starting off by negotiating puts you in a better financial position,” she says. “Plus, your starting salary determines how much you will continue to earn over time when you get raises and promotions: The higher you start with, the better off you’ll be.” Similarly, if you’re already in a job and have not asked for a raise lately, now’s the time.

There are other ways, too, to pay off your student loans faster, including getting a side hustle or part-time job, says Germano. “Plus, you could put the majority of any windfall — inheritance, a tax refund, and so on — toward the debt, too,” she says. Furthermore, you can keep in mind that small additions to your student loan also add up, such as designating unused Starbucks or take-out coffee or food money toward your loans. Additionally, you can go through your bank and credit card statements and eliminate any unnecessary subscriptions you may have signed up for. Then, add that money to your student loan payments, too.

Stay Motivated To Pay Off Your Debt

If you’re among those with student loan debt yet to finish paying off, Germano says that the most important thing to do is to keep at it. “Paying off debt can be a journey that you don’t finish overnight,” she says. “Backsliding is also normal, so try to be kind to yourself — allow yourself to wallow for a minute and then start again. Eventually, as you continue to put more and more money toward your debt, you’ll reach your goals.”

Meanwhile, keep #EachforEqual at the forefront of your mind and continue to live out the International Women’s Day theme in your life today and every day. That way, you’ll  know you’re being as proactive and empowered as possible toward equality for all. 

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