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As per a recent report, women are carrying around 2/3rds of the outstanding student loan debt in the nation. This alarming statistic has been given by a new report offered by the American Association of University Women which is an education advocacy group. These statistics are further backed up by the fact that 58% of college students today are women, which explains, in part, why women carry more of the nation’s student debt. Many of these women are also pursuing higher education so student loan debts are gradually becoming a heavy burden for many of them.
At present, 7 among 10 students resort to student loans to obtain their degree. The average student leaves school with $30,000 in debt and nearly 25% of them owe more than $100,000. Majority of the Americans are extremely burdened with educational loans and these loan amounts are way more than what they owe on car loans and credit cards.
Implications of Student Loan Debt on the Economy of the Nation
As long as the conversation on student loan debt is concerned, this starts with definite demographics that are harder and tougher than others. Even though you might compare apples to apples, women are still carrying more debt individually. As per recent statistics, in the year 2016, the average woman left undergraduate education owing $22,620 compared to $18,650 for their male counterparts. In fact, black women are taking on disproportionate debt amounts, racking up $25,000 in the form of student loans to obtain a bachelor’s degree. It has also been found that women generally take longer to graduate due to household responsibilities. This leads to more times in school, leading to more and more student debt.
As compared to men, women are found to be borrowing in larger amounts to pay for their education. This is not due to their being a higher cost of education in comparison to male students. Instead, this is found to be because women earn, on average, 28% less on the job when compared to their male counterparts. This wage-gap clearly indicates that women will not be able to save as much as men to pay for their education and they will also take longer to pay their loans back, digging themselves even deeper into debt.
What do the personal finance experts have to say?
While the men are seen to pay back 14% of their debt annually, women can only pay off about 10% of their debt, as per a recent study. 3 years post-graduation, women have been seen to pay back less than a third of their debt and during the same time period, men has successfully paid back 40% of the entire amount. These numbers clearly indicate the irony of education and the system that prevails in the country.