Before the pandemic, wage disparities already made it harder to repay student loans for working women than for men. Today, after a second year of juggling the increase in caregiving duties, over a million women have had to drop out of the workforce as a new / old problem looms: restarting healthcare payments. federal student loans.
“Don’t paint on individual experiences that could have been good or bad (during the pandemic), but women who have college debt and earn less money are more concerned,” says Kathryn Anne Edwards, economist at Rand Corp ., a nonprofit global policy think tank.
When the federal student loan payment hiatus ends after Jan.31, 2022, repayment will be particularly difficult for some groups of women who have seen their incomes plummet, experts say.
STUDENT DEBT WAS ALREADY A BIGGER PROBLEM FOR WOMEN
Although women overtake men in terms of obtaining a degree, women also have more student debt. A 2021 analysis of federal data by the American Association of University Women showed that women carry an average student loan burden of $ 31,276, about 7% more than men.
Once women enter the workforce, they are less able to repay this debt due to gender income disparities and – for black and Hispanic women – racial wage differentials, according to several experts.
“(The borrowers) pile up that debt, and then something like a pandemic emerges, exposing problems that are already there,” says Dominique Baker, assistant professor of educational policy at Southern Methodist University in Dallas.
WOMEN COULD SEE THEIR LIFETIME EARNINGS REDUCED
Let’s say you are a woman in a relationship with a man. You both work, but he earns more than you. When the pandemic hit, your toddler’s daycare closed and your school-aged child switched to home learning. You both weren’t able to take care of the kids and keep your jobs. Who can you expect to quit their job first?
“We didn’t make it easy for people to take time off or have more flexible hours so that they could look after others as well,” Baker said. “It creates an environment in which women have had to slow down or stop their participation in the labor market while trying to take care of others. “
The return of women could take time: nearly 1.66 million women left the labor market and did not return from February 2020 to August 2021, according to data from the Federal Bureau of Labor Statistics.
Leaving the workforce for any period of time can have long-term income effects for life, Edwards says. Slower increases in profits could make it harder to pay off debt.
WOMEN DON’T HAVE TO LOSE THEIR JOBS TO BE DISADVANTAGED
According to experts, there have also been changes in the way women work that could have a lasting impact, including reduced hours, time off for care and a move to more flexible or lower paying jobs.
Now that employers know more about the details of employee lives through video calls, Edwards adds, women with children may be seen as less engaged in their jobs and could be ignored for promotions.
Women are often responsible for aging parents in addition to children and should stop working to provide care, says Kate Nielson, senior director of public policy, legal advocacy and research for the Association of American University Women. “If you’re lucky it’s a few weeks’ effort, and if you’re not, it’s a lot longer and can be incredibly disruptive,” Nielson adds.
WOMEN IN DEBT AND WITHOUT DIPLME ARE THE MOST AT RISK
Women who have student debt but no degrees will be the most vulnerable to payment problems in February.
It is not known exactly how many women fall into this category, but the majority of students who attend university take out loans, and nearly 40% of students do not graduate within six years of entering the university. university, according to data from the National Center for Education. Statistics.
Going into debt without completing college leaves borrowers in debt without the career opportunities and lifelong benefits of a college degree. This can lead borrowers to miss payments and default, with consequences such as wage garnishment, damaged credit, and loss of eligibility for federal student loan safety nets.
FIND WAYS TO GET HELP WITH LOAN PAYMENTS
At the end of the student loan payment break, all borrowers have the option of keeping their accounts in good standing and avoiding defaults. This includes signing up for an income-based repayment plan – which sets payments at $ 0 if you’re unemployed – or requesting a payment break (this time with interest).
You will need to contact your loan officer to make changes to your payment plan. Keep in mind that your loan manager may have changed during the payment break. Make sure your current repairer has your most up-to-date contact details.