Story at a glance
- While women take out more debt, the gender pay gap prohibits them from paying off loans and building wealth.
- The issue worsens for Black and Pacific Islander graduates.
- President Biden has yet to take any action on student loan forgiveness.
The total sum of all of the outstanding student debt Americans owe comes in at more than $1.7 trillion dollars, underscoring the burden student loans have on a generation of U.S. students and graduates.
A new report focuses on the loan industry’s effect on women, noting that they tend to take on more debt and enter the workforce making less than their male counterparts.
The American Association of University Women’s (AAUW) Deeper in Debt survey put specific numbers on this trend: Women borrow an average of $31,276 as opposed to men’s $29,270, and only leave college making about $35,338.
This starting salary is 81 percent of what men usually earn.
“Taken together, the student-debt crisis and the gender wage gap make it difficult for women to get by—let alone get ahead,” the report reads.
Depending on the woman’s race, this figure could be even lower. White women report having the lowest cumulative debt upon graduation.
All other races and ethnicities report owing higher sums in both the loan’s principal and interest a year following graduation. Black or African American women tend to owe the most, with an average of $41,466.05 in student debt per person.
Pacific Islander or Hawaiian women take out the second highest amount in loans, at a $38,747.44 average. Following this statistic are American Indian or Alaska Native women, white women, and Hispanic and Latina women, respectively.
Asian women tend to borrow the least, with an average of $27,606.60 in debt one year after undergraduate graduation.
Authors at the AAUW explain that both the gender and racial wage gap prove the student loan industry makes it difficult for women of all racial and ethnic backgrounds to build wealth in the U.S. economy. They call for a debt forgiveness plan that cancels debt in an equitable way.
“Forgiveness should extend to all borrowers, without regard to income, default status, repayment plan, industry sector or institution attended. This will ensure that the neediest borrowers, low-income and low-wealth individuals, are not inadvertently excluded.”
This comes as President Biden and his administration have yet to take any action on student debt despite campaigning on a platform of loan forgiveness and industry reform.
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