End of student loan forbearance will be harder on women
Pandemic exposed long-standing problems and made new ones
Before the pandemic, wage disparities made it tougher for working women to pay off student loans than men. Now, after a second year of juggling more caregiving duties, over a million women have had to leave the workforce as a new/old problem looms: the restart of federal student loan payments.
Kathryn Anne Edwards, an economist at the Rand Corp., a nonprofit global policy think tank, notes, “individual experiences … could have been good or bad (during the pandemic), but there’s more concern for women that have college debt and earn less money.” When the federal student loan payment pause ends after Jan. 31, 2022, repayment will be especially difficult for those women whose earnings plummeted, experts say. STUDENT DEBT ALREADY BIGGER PROBLEM FOR WOMEN: Although women surpass men in degree attainment, they also have more student debt. A 2021 analysis of federal data by the American Association of University
Women showed women carry an average student loan of $31,276, about 7% more than men. Once women enter the workplace, they’re less able to pay off that debt due to earnings disparities as a result of gender and/or racial wage gaps, multiple experts say.
“(Borrowers) accrue this debt and then a thing like a pandemic exposes issues … already present,” says Dominique Baker, assistant Professor of Education Policy at Southern Methodist University in Dallas.
WOMEN COULD SEE LIFETIME
EARNINGS REDUCED: Say you’re a woman in a partnered relationship with a man. You both work, but he earns more. When the pandemic hit, your toddler’s day care closed and your elementary school-age child switched to learning from home. The two of you couldn’t manage to take care of the kids and keep your jobs. Who can you expect to leave their job first?
“We have not made it so people can easily take time off or have more flexible schedules,” Baker says. “That creates an environment where women have had to slow or stop participation in the labor market while caring for others.”
Nearly 1.66 million women left the workforce and did not return between
February 2020 and August 2021, according to federal Bureau of Labor Statistics data. Leaving the labor force for any period of time can have long-term effects on lifetime earnings, Edwards says. Slower earnings increases could make it more challenging to repay debt. WOMEN DIDN’T HAVE TO LOSE THEIR JOBS TO BE AT A DISADVANTAGE: There were also changes in the way women work that could have lasting impact, experts say, including reduced hours, time off for caregiving and switching to more flexible or lowerpaying jobs.
Now that employers know more about employees’ lives thanks to video calls, Edwards adds, women with children may be perceived as less committed to a job and could be passed over for promotions.
Women are often responsible both for children and elderly relatives, and are expected to take time off to provide care, says Kate Nielson, senior director of public policy, legal advocacy and research for the Association of American University Women. “If you’re lucky, it’s a few weeks and, if you’re not, it’s much longer,” Nielson adds. WOMEN WITH DEBT, NO DEGREE MOST AT RISK: Women who hold student debt, but not degrees, will be the most vulnerable to payment challenges come February.
It’s unclear precisely how many women are in this category, but most students who attend college take on loans and nearly 40% of them do not complete their education within six years, according to the National Center for Education Statistics.
Taking on debt without completing college leaves borrowers in debt but without the career opportunities and lifetime earnings benefits of a college degree. This can cause them to default, which can lead to wage garnishment, damaged credit and loss of eligibility for federal student loan safety nets.
FIND WAYS TO GET HELP WITH LOAN PAYMENTS: When the student loan payment pause ends, borrowers have options to keep their accounts in good standing. These include enrolling in an income-driven repayment plan — with $0 payments if you’re unemployed — or requesting a payment pause (but with interest). Contact your loan servicer to change your payment plan. Keep in mind your servicer may have changed during the payment pause, so make sure it has your up-to-date contact information.