Student Debt and the Pay Gap
College affordability and the impact of student debt on our economy is a very real problem. Earlier this year, I traveled across Missouri, talking to students, parents, teachers, and financial aid administrators about the economic crisis we face in education, and returned to the Senate to increase access to Pell grants, strengthen refinancing options, and make financial aid transparent and accessible for students and their families.
But as we mark #BlackWomensEqualPay Day 2016 — the day in which it takes a black woman in America to finally make as much as her white male counterpart did in 2015 — it’s important to remember that this massive burden we are placing on our children does not affect everyone equally.
According to the Institute for College Access and Success, nearly 60% of Missouri students graduate in debt, with the average debt being $25,844. But when women are paid less in the workplace than men, it also becomes harder to pay off their student loans quickly and efficiently. In a report released by the American Association of University Women, women are paid 82% of what their male counterparts are paid one year out of college.
When you dig down to see what that means for student loan repayment, what you find is truly concerning.
Male students who graduated in 2008 were able to pay off 44% of their student loans by 2012. Female students only paid off 33% — and the hardest hit were African-American women and Hispanic women, who paid off 9% and 3% of their debt, respectively.
The longer women carry student loan debt, the more interest they accrue, the more they pay over time, and the less they are able to save for other life expenses — such as a house, retirement, and college funds for their own children. This financial burden can also make it difficult for women to take professional and financial risks — like starting a business or pursuing an advanced degree — that could benefit them and their families in the long run.
So what does this mean?
- It means that not only are American women paid less in the workplace, but they are paying more for their education to get there in the first place.
- It means the hardest hit are minority women who face a larger wage gap and more obstacles to repaying their student loans.
- It means that we have a long way to go, and a lot of work to do, before the American Dream is truly a reality for everyone.
Learn more about Claire’s efforts to reduce student debt in our country and make college affordable — including better refinancing options, increased access to Pell grants, supporting opportunities like Missouri’s A+ Program, funding job training programs, and pushing for transparency in the financial aid process — at medium.com/senator-claire-mccaskill.