How women bear the brunt of student loan debt crisis

Americans are holding over $1.7 trillion of student loan debt, two-thirds of which is held by women, totaling about $929 billion, according to the American Association of University Women. The group's CEO Gloria Blackwell and Yahoo Finance's Ronda Lee join the show to discuss why women are entangled in this financial burden and how the gender pay discrepancy will have a massive impact this October, when student loan repayments resume. Blackwell details ways in which both the government and businesses can enforce and reform policies that alleviate this burden including "making sure that workplaces are equitable" and "that we move forward in pushing the Paycheck Fairness Act, for example, which will really strengthen the protections that were put forth in the Equal Pay Act."

Click here to watch more of Yahoo Finance's special coverage "Student Loans: Smarter Strategies."

Video transcript

- Student loans are a major concern in the US, with Americans holding $1.7 trillion in education debt. Now one little known fact is that a majority of that debt is held by women, almost two thirds of it, in fact, with women on average owing about $2,700 more than their male peers.

Joining us now with some greater insight into this as part of our special student loans smarter strategies are Gloria Blackwell, American Association of University Women CEO, and Yahoo Finance's reporter Ronda Lee. A big welcome to you both.

So, Gloria, $929 billion of student debt is what the women in the United States are shouldering. Now obviously there's-- women are earning less than men, but talk about some of the nuances as to why women are holding two thirds of this debt.

GLORIA BLACKWELL: Absolutely. So women are holding a tremendous amount of student debt in part because women earn higher-- earned degrees at a higher rate, they're enrolled more in college because women, unfortunately, have to have higher credentials in order to be more gainfully employed and to earn an acceptable salary.

So they've taken on more degrees, they've taken on more debt, then they emerge with a degree, and they are earning less. And unfortunately, it takes them longer to pay off that debt. So all of those things colliding are the reasons why women have a substantial portion of that student loan debt, and it really is untenable at this point.

RONDA LEE: So let's get into some gender pay discrepancies. You have white women making only $0.78 to the male dollar, Black women are only getting 68%-- $0.68 to the dollar, and Latinx women are only getting 58%-- $0.58 to the dollar. So when it comes time for loan repayment, there's a huge stark discrepancy, and we saw this even when the pandemic happened that a lot of women were forced out of the workforce because they had to do childcare or care for loved ones.

Can we talk about how this is going to impact October 1 and loan repayments with inflation and everything else when it comes to the gender pay discrepancy?

GLORIA BLACKWELL: So this is sort of looking like the collision of the gender pay gap, the racial pay gap, and the motherhood penalty. That collision is one that will have a devastating impact on women's economic security. So women of color are earning less as you indicated, meaning that they're already behind the eight ball when it comes to meeting basic expenses.

So when the loan repayment pause ends, that means that they're going to continue to struggle in order to pay for basic expenses. It has an impact on their ability to pay for childcare, saving for retirement, paying for medical expenses. All of these are sort of the perfect unfortunate storm that happens to women of color, in particular, when we talk about the wage gap as well as the student loan debt crisis that we're undergoing.

- So, Gloria, in terms of leveling the playing field here and perhaps some solutions at the policy level or perhaps at the actual institutions themselves or even the companies that are bringing women on and perhaps helping pay for this education, what do you see as some of the key solutions that could really level the playing field here for women?

GLORIA BLACKWELL: Well, one of the ways in which we obviously could lower the playing field would be to pay women their worth. That means the stereotyping and the discrimination, the biases that are against women in the workforce to diminish and dismantle the ways in which women are coming to the table with the credentials that are equal to or higher than men's, yet they are not being afforded the same salaries of the same level of promotions. So definitely ending the pay gap by really making sure that workplaces are equitable is an incredible solution.

And on the advocacy side, we're looking at just making sure that the policies that are in place now around pay gap laws that they are enforced, and that we move forward in pushing forward the Paycheck Fairness Act, for example, which will really strengthen the protections that were put forth in the Equal Pay Act.

I think that the research is telling us that higher education is becoming more and more unaffordable, and so states and our government need to look at the ways to make higher education more affordable, and that means examining not just the student loan payment debt process that we have now, but also looking at how it can impact those who may be purchasing student loans in the future.

And that means looking at Pell Grants, making sure that these income driven repayment plans are fair and equitable, and just making sure that those predatory lenders don't have another opportunity to take advantage of those who are more disproportionately impacted.

RONDA LEE: So, Gloria, I'm going to piggyback off of what you just said about the predatory lenders because 50% of borrowers that go in default are borrowers who attended these for profit colleges that have said it's going to be faster, it's going to be quicker for you to get a degree. Typically, they have cosmetology, beauty programs, and people are signing up, particularly women, for these programs thinking it's going to be a faster, quicker way to get an education, to get higher pay.

These schools closed, they shut down, and now borrowers are stuck with debt. They don't have credits that can transfer and we have now this new injunction against the borrower defense discharge. Can you talk about how these for-profit predatory lending institutions impact women when it comes to the student loan repayment crisis?

GLORIA BLACKWELL: It's unfortunate that these predatory lenders have been allowed to get away with what they've been allowed to get away with, and also because it has a disproportionate impact on Black borrowers. Black women in particular tend to have a higher level of that level of debt.

They sometimes have certainly preyed upon the most vulnerable of students, giving them the impression that they're going to be receiving something that is going to be of higher value, and it turns out even those who complete those programs end up having lower overall salaries, those students tend to default like you said, 50% more than others.

And putting something in place like the ability to really discharge those loans has been quite impactful, but putting a stop to it will then put those women and those individuals who have gotten those loans and many by quite deceitful tactics, it will put them in a place where once again, they are in an economically unstable place to take care of their basic expenses, taking on more credit card debt. And in particular, those who don't even get a degree are still saddled with that debt for many, many years to come.

- We do appreciate you joining us with your insights and really adding some transparency around this conversation. Gloria Blackwell, American Association of University Women CEO, and Yahoo Finance's reporter, Ronda Lee. A big thank you to you both.

GLORIA BLACKWELL: Thank you.