Law school was supposed to be Erika Stallings' path to financial stability. The first in her family to attend college, Stallings earned a full ride to the University of North Carolina, and then chose to attend Georgetown Law because the school offered her a partial scholarship. But she graduated with $115,000 in student loans anyway, and today, the $1,000 monthly loan payment eats up a big chunk of her paycheck. So despite her white-collar job and fancy diplomas, she remains in a state of financial precariousness.
"I'm probably as well-off as someone age 30 can be," Stallings said in an interview. "But even I feel the panic of knowing if I lost my job today, because I've been trying to pay off as much debt as possible, I don't have the Suze Orman emergency fund. If I were unemployed for a while, trying to keep up with these $1,000 a month payments would be terrifying."
Of course, Stallings situation is not unique. Across the United States, women like Stallings are staring down piles of student debt—bigger piles, in fact, than the ones facing their former male classmates. They're also making less money with which to pay off that debt. The combination is making women poorer, more dependent, and setting them up for a more tenuous retirement. And it's creating a systematic gender wealth gap that persists for women's entire lives.
"I don't have a familial safety net," Stallings said. "If I didn't have this student loan debt, I could start building my own safety net. There would be more money for me to send home. I could switch careers. Last year I had major surgery—adding those bills onto the student loan debt is scary."
With more women attending college and graduate school than ever before, it naturally follows that more women are also racking up student debt. Women are more likely to take out student loans than men, in an economy where college costs significantly more than it did a generation ago. While it's a significant feminist achievement that women now account for 57 percent of graduates earning bachelor's degrees, those women are more likely than their male peers to start their careers in a financial hole: 68 percent of those female graduates are leaving school with some amount of student loan debt, compared to 63 percent of men.
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That happens for a few reasons. Women make up 62 percent of students at private and often pricey four-year institutions, where tuition costs are often in five-figure range; there are also a million more women than men in community colleges, which are more affordable, but have high drop-out rates – just one in five first-time full-time community college students graduates in five years, leaving the ones who don't with limited job prospects and accumulated debt.
Women also make up a larger number of first-generation college students than men, and students who are the first in their family to go to school are more likely to come from low-income families, more likely to take out loans, and more likely to drop out before completing a degree than students who have a parent with a bachelor's degree. Female college students are also more likely than men to be from poor families, whether they're first-generation students or not, and that financial disadvantage requires them to borrow more.
Once they graduate—if they graduate—women make less money than men , and so spend a greater proportion of their salaries to pay off their loans. So while their male peers have more money to play with – to put into a 401k, to invest, to save for a home, to put in an emergency fund, to use as a cushion when they take a big career risk – women throw much of their income down a student debt hole that often stretches on for decades.
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But while Democratic politicians have called attention to the gender pay gap, and proposed legislation to close it, there has been less of an emphasis on how student loans help turn the pay gap into life-long gender wealth disparities.
A 2013 study by the American Association of University Women found that women who graduated in college in 2008 saw an immediate gap in their earnings compared to their male classmates: One year out of college, women working full-time made just 82 percent of what men who graduated the same year made.
Some of that gap can be accounted for by factors like the number of hours worked, the kinds of occupations women tend to work in, and employment sector. But even when all else is equal, women still make 7 percent less than men one year out of college.
"Because women earn less, paying back their student loans is effectively more difficult for them because a higher proportion of their earnings is devoted to the student loan payment," said Catherine Hill, AAUW's vice president of research and one of the study's authors. "Because of the pay gap, the student debt is taking out a bigger chunk of their smaller paychecks, leaving them with less money to live on."
There is some degree of "choice" involved in the pay gap – insofar as women funneled into certain careers and men into others is a "choice." More women major in the humanities than in fields like business, engineering and the sciences, which usually lead to better-paying jobs after graduation. Within employment sectors, men gravitate toward high-paying specialties, while women may focus on areas that are more fulfilling or more flexible, but less remunerative.
But even when researchers account for those factors, women still make less than men when in the first year of their careers, even when doing the exact same jobs—a trend that persists throughout their careers. Gender discrimination, intentional or not, seems to be the only explanation.
Almost no industry is immune. In business and management jobs, women a year out of college make 86 cents to their male peers' dollar. If they work in sales, it's 77 cents. Among nurses, a field dominated by women, the handful of men in the industry make much more over the course of their careers—an average of $5,100 every year.
This financial burden can impact every major decision a woman makes for the rest of life—from her career to her marriage to her children to caring for her aging parents to her retirement. Research shows that women who have student loans are less likely to marry—and the more in debt they are, the more their marriage prospects decrease—while the same doesn't hold true for men. According to the female-focused financial site LearnVest, nearly half of in-debt college graduates delayed buying a home because of their student loans, and nearly a quarter postponed having kids.
"You think about the expense of kids and it's like, how would I ever take that on and maintain the loan payments? It gives me pause," Stallings, the first-generation college student, said. She added that while she wants to be able to plan for children, the weight of her debt makes that difficult.
"I have a BRCA II mutation, so one consequence of that is I'm probably going to have my ovaries taken out when I'm 38," Stallings said. "If I had the money right now I would get my eggs frozen, but trying to find another $15,000 to do that is not easy."
"Then saving for an emergency fund," she said, describing her financial priorities. "Then a house or an apartment, not necessarily for myself -- I've thought of buying my mom property in North Carolina because it's cheaper, and that would stabilize her financial situation."
And unlike lots of women, Stallings has a well-paying job that allows her to make her monthly payments in full. For the many women who default or miss payments on their student loans, the hit to their credit scores can compromise their ability to buy a car or a house or even rent an apartment for years to come. For women with car payments or mortgages, piled-on student debt forces some hard choices.
When women spend higher proportions of their income on student debt—and 47 percent spend more than the recommended 8 percent, compared to just 39 percent of men—they're less able to make the kind of investments that build long-term wealth. There's less money to put into a 401k, to put toward emergency savings, to buy a home. And after a lifetime of shoveling money toward student loans, and getting paid less than their male counterparts, women entering retirement could be looking at years of financial stability, even poverty.
"I joke all the time that I'll pay off my house before I pay off my student loans," Suzanne Meyer, a 43-year-old high school English teacher in North Carolina, told me. "I'm going to be 87 years old in a nursing home and still paying off my student loans. That's my reality."
Meyer took out about $30,000 in loans to go to graduate school and get her teaching license. After consolidating, deferring, and missing payments, she now owes nearly $60,000.
"I pay my mortgage first, and we need electricity and food, so the student loans are always last to get paid, and a lot of times that means they don't get paid at all," she said. "Which sounds awful, and it's doing horrible things to my credit, but the reality is they aren't going to come take my licensure because I didn't pay my bill."
The $5,000 she's hoping to get from the federal loan forgiveness program will make a dent, Meyer said, but not a big enough one. She would like to see the government consider more innovative ways people with student loan debt could repay it—for example, by volunteering or tutoring in a state or federal educational program.
"It's unrealistic to say I want the whole loan to go away," Meyer said. "I did borrow the money. But I can give back in other ways that the government needs. It's a government loan and the government needs certain things – there are programs out there that need assistance and I would be capable of doing that. Let me pay it back in a different way."
While she's not making enough money to pay back her own student loans, Meyer has another one looming in the near future.
"I have a kid in high school. I don't have a college fund for her," she said. "I'm looking at the other side of student loans now for my child, and that scares me."
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