Why Elizabeth Warren’s student debt plan is a big deal for women

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Sen. Elizabeth Warren (D-MA), one of the many Democratic candidates currently vying to run against President Donald Trump, announced a proposal on Monday to confront the nation’s student debt crisis — and effectively aid millions of women who are struggling with student loan debt, the pay gap, and the motherhood penalty all at the same time.

Warren’s plan would ensure that those making $100,000 or less would receive $50,000 in student loan forgiveness, while people earning more than $100,000 and up to $250,000 would receive progressively less forgiveness of their debts. According to Warren’s campaign, her plan would erase all student debt for more than 75% of the Americans still paying off their school loans, affecting 42 million people.

It’s a policy plan that would have a considerable impact on women, who carry nearly two-thirds of the country’s outstanding student loan debt — an estimated $929 billion — according to a 2018 American Association of University Women (AAUW) report. AAUW’s study did not account for nonbinary and gender nonconforming people.

“[Education] is meant to be this great equalizer, and we’ve been lauding it as this great equalizer for decades,” said Kim Churches, the CEO of AAUW. “Yet for women in particular, if we’re taking on a disproportionate amount of student loan debt and entering the workforce already behind our male counterparts for a variety of reasons — biases, discrimination, policies and laws that haven’t been updated in far far too long — it’s the compounding effect over the decades.”

Women, and especially women of color, are hit particularly hard by student loan debt. Women have less income to pay off their debt than male peers and less support when they become parents. This means greater economic insecurity for families, according to Churches.

Of all of the graduates in 2019, AAUW expects women to earn 61% of associate degrees, 57% of all bachelor’s degrees, and 58% of all master’s degrees. But research shows that even one year after completing their degrees, women already earn less than their male counterparts across industries and sectors.

The gender pay gap, which has been well-established by researchers over decades, continues to set back women’s economic progress, with women making only 80.5 cents for every dollar earned by men in 2017, according to the Institute for Women’s Policy Research. Latina women earned 53% of white men’s median annual earnings and black women earned 60.8% of white men’s median annual earnings.

Just as the gender pay gap affects women of color differently, so does the burden of student loans. Black women with student debt carry an average of $30,400, compared to $22,000 for white women and $19,500 for white men, according to the AAUW report. Thirty-four percent of all women and 57% of black women who are currently repaying student loans said that within the past year, they could not meet some of their essential expenses.

Churches said that when women enter the workforce today, they confront “workforce paradigms that were frankly made up over the Greatest Generation or at best the Boomer generation … that is not how we work today and those paradigms have not shifted.”

For example, mothers often experience what is known as the ‘motherhood penalty” while fathers experience the “fatherhood bonus” — which means that employers assume that mothers can’t fulfill their work duties as well as child-free women, making it more difficult for them to advance at work, while fathers tend to be paid more after they have kids. Research published in 2011 out of Washington State University found that there isn’t a great difference in work quality, with mothers and fathers performing similarly at work. When there is a difference, mothers report greater job engagement and work intensity.

Women aren’t just facing discrimination and structural sexism in the workplace that lowers their income, and therefore their ability to pay off their student loans. They may have fewer funds to put toward their college education in the first place.

In 2017, T. Rowe Price, an asset management firm, conducted a study that found 50% of families with boys had saved money for their college education, compared to 39% of families with girls. For families with boys, 68% said saving for their child’s college expenses was a greater priority than saving for retirement while 50% of families with girls said they were willing to prioritize college savings over retirement.

Although Churches said she does not have research on how families that are fortunate enough to help finance their children’s education spend differently according to gender, she said that anecdotally she has seen many recent examples of this phenomenon.

Warren’s plan would also help mothers who enroll in school and face their own challenges struggling with student debt, said Colleen Campbell, the director for postsecondary education at the Center for American Progress. (ThinkProgress is an editorially independent news site housed at the Center for American Progress Action Fund.)

“Women who enroll in college as parents — and parents who do enroll are disproportionately women — that can have a really substantial impact on intergenerational debt and poverty, should a mother not be able to continue her degree and finish,” Campbell said. “A plan like this could go a long way toward helping women to build some wealth.”

Although Campbell said she thinks Warren’s plan goes a long way toward addressing inequities in our education system, she added that other structural changes are also necessary to help women and families thrive.

“I do think it’s important that we don’t try to fix everything through the student loan system. We still need stronger worker power. We need living wages for everyone. We need family leave policies that are friendly toward everyone and address disparities in the labor market and discrimination in hiring.”




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