An unfortunate thing happened on the way to greater diversity on college
campuses: As women and minorities enrolled in greater numbers, tuition
increases far outpaced wage growth.
[post_ads]While greater diversity didn't lead to the tuition hikes, researchers
are pointing to how the two trends are merging in a perfect storm of
rising debt and depressed income. Women and minorities are more likely
to borrow to pay for their college degrees, yet their lower lifetime pay
means many will end up struggling to buy homes and sock away money.
They may even have to put off getting married or having children.
The
impact of college debt on women and minorities is receiving a call to
arms, thanks to researchers such as the American Association of
University Women (AAUW). In a recent report, it found that women are falling behind male college graduates in debt repayment because of these trends.
This
doesn't affect only women or minorities who enter low-paying fields
such as child care. Economists find that even female attorneys who take
on large amounts of student debt may delay marriage or snub public
sector work as a result.
The problems with financing a college
degree may start at home. Women are less likely than men to receive
family assistance to pay for college, according to a recent study from
LendEDU, a marketplace for student loans. Fifty percent of women
surveyed by the company said they received no help from their families,
compared with 43 percent of men.
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Women also report experiencing
more financial difficulties after college. More than one-third who are
repaying college debt said they struggle to meet their basic expenses,
compared with just one-quarter of men with student loans. Women of color
experience even greater hardship. Nearly six out of 10 black women with
student debt said they have problems handling their essential
expenses.
"Many do not think of student debt as a women's issue
despite the fact that women represented 56 percent of those enrolled in
American colleges and universities in fall 2016," the AAUW report noted.
"This report reveals that they also take on larger student loans than
do men. And because of the gender pay gap, they have less disposable
income with which to repay their loans after graduating from college, so
they require more time to pay back their student debt than do men."
Those
dynamics boil down to a serious long-term debt problem for women, who
hold almost two-thirds of the $1.3 trillion in outstanding student
debt.
Compounding the problem is the gender pay gap, or when women are paid
less than men for doing the same work. Even after controlling for
issues such as education and experience, women earn less than their male
counterparts, which can set up a lifelong earnings deficit and make it
tougher for women to pay back student loans.
The problem is
increasingly stubborn at the top of the wage-distribution spectrum,
where women earn just 74 cents for every $1 men earn. Higher-earning
women typically have bachelor's or graduate degrees, yet still suffer
from lower wages than their male colleagues. Economists have pointed to a
number of issues, including bias and "temporal inflexibility," or the
demands that some workplaces -- such as law firms -- enforce on
workers.
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Student debt can have a significant impact on women with
law degrees, according to recent research from Holger Sieg of the
University of Pennsylvania and Yu Wang of Ryerson University. In a paper
published at the National Bureau of Economic Research,
they found attorneys with higher debt levels were less likely to work
in the public sector. Some women may also pick less prestigious -- and
cheaper -- law schools as a way to avoid accumulating debt, they noted.
"Our
model is consistent with the observed fact that female lawyers with
large student debt tend to delay marriage and child rearing," they
wrote. "Moreover, they tend to prefer higher paying jobs in the private
sector to pay off their student debt."
Policy changes that help
close the gender pay gap would be a major step forward, the AAUW noted.
That could mean closing loopholes in the Equal Pay Act or barring
employers from asking candidates about their previous salary history,
which is currently prohibited in several cities and states, including
Massachusetts.
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