Women Pay More for Student Loans

You’re going to hear a lot about student loan debt over the next two years and women in particular need to be paying extra close attention. There are big policy differences between the Presidential candidates and you should know what they are really about and why it’s such a big deal. Everyone who has, or is considering taking out student loans will be affected by how we decide to move forward in handling the student debt crisis, but women will be affected more and here’s why: women pay more for student loans.

Women pay more for their student debt than men do over their lifetimes. The reason for this is not that women are charged more with a higher interest rate or are being required to pay more in tuition, that would be illegal. The way it happens is much more insidious-Unequal Pay. When you take out your student loans and you sign your promissory notes, you are guaranteed certain interest rates based on the fluctuating economy and the few regulations that protect student borrowing that exist. These interest rates are not based on your gender, they can’t be legally. But your earning potential and your access to certain fields and opportunities are. So for example, Timmy and Jane each take out $20,000 in school debt and have a locked in interest rate of 5% because these are Perkins Loans. (I know this is a very idealized scenario, and most interest rates and principle balances will be much higher but bear with me.)

The Equal Pay Act of 1963 does little to combat the practical disparity to access and opportunity and despite the law being aimed at stopping discrimination, women are still paid less than men.

This means that both have paid the same tuition, accrued the same debt and will pay the same amount for their education, right? Wrong. Jane will end up paying much more over her lifetime because statistically, she won’t earn as much money as Timmy will for the same work, substantially less if Jane is a woman of color and Timmy is a white man. This means Jane will not be able to pay back her loans at the same speed. Interest will continue to accrue and she will ultimately pay a lot more over her lifetime. 

Less Access, Less Opportunity, Less Money

Statistically Jane also will not have access to the same professional opportunities, either in the same areas of employment or at the same earning levels as Timmy. It’s also likely that Jane did not have access to the same scholarship opportunities or was tracked into certain fields as early as elementary school and on and on. So Timmy choosing to major in Business and Jane choosing to major in Psychology is not as simple or as self-empowered as it sounds. It is well established that boys receive preferential treatment in education in the more traditional fields that tend to provide a more substantial income and are tracked into these fields at a young age. And don’t even get me started on self-esteem issues and empowerment disparities. (https://www.latimes.com/science/sciencenow/la-sci-sn-girls-boys-brilliant-20170126-story.html) Although we have created scholarships and legislation to help combat this disproportionate favoritism, the imbalance nevertheless remains prevalent and begins at a very young age for children. If you are a girl, you are not taught confidence in the same way and you are tracked into fields where you will have less opportunity, thus you will earn less as a consequence. 

Women Pay More for the Same Goods and Services

Let’s take this even further. Once a woman is out of school and has secured a job that pays her less for the same work, she has to report to this job with a much higher investment in clothing, grooming and living costs than a man. It’s at least six times more expensive to be a woman, as women are often charged substantially more for the same grooming products necessary for employment in their respective fields. It costs more to dress as a woman, to deal with upkeep as a woman and to buy products that men don’t typically ever buy. This is called a Pink Tax and it means that women still pay more than men for the same goods and services.

So for arguments sake, let’s say Timmy and Jane get identical job offers after college, with an employer who believes in Equal Pay and truly does provide equal opportunity. It will cost Jane at least six times more to report for this job and perform it under the standards set in the workforce than it will for Timmy. That’s six times less money available to make student loan payments, which means Jane’s debt continues to draw interest while Timmy’s is paid off over a much shorter time. This is an enormous economic loss over the span of a lifetime for women. This gender specific loss only increases based on certain fields in which clothing and appearance tends to be a focus, such as attorneys. Simply put, it costs a woman more to buy her suits, dry clean her suits and wear her suits than a man. I experienced this firsthand in law school in Oklahoma when I was told that my dress shirts cost $5.99 to dry clean instead of $.99 because they were “smaller and didn’t fit the standard press.” I asked why they hadn’t invested in a smaller press to accommodate ladies, but that didn’t get me far. I can hear that “Bring home the bacon…fry it up in a pan” song now...

Until we establish true Equal Pay for equal work, women will continue to suffer economic loss in every aspect of their lives, including student debt. If you are a woman of color, you will feel the effects of this even more. This is why it’s critical that women pay attention to the various plans for Student Debt relief being proposed now by some Democratic candidates and why it’s necessary to get involved. Because even if there is a plan for helping with student debt in the future, as a woman you will only benefit 85%.

Amee Vanderpool writes the “Shero and a Scholar” Newsletter and is an an attorney, contributor to Playboy Magazine, analyst for BBC radio and Director of The Inanna Project. She can be reached at avanderpool@gmail.com or follow her on Twitter @girlsreallyrule.