Before the pandemic, wage disparities already made it tougher for working women to pay off student loans than men. Now, after a second year of juggling increased caregiving duties, over a million women have had to drop out of the workforce as a new/old problem looms: the restart of federal student loan payments.
“Not to paint over individual experiences that could have been good or bad (during the pandemic), but there’s more concern for women that do have college debt and earn less money,” says Kathryn Anne Edwards, an economist at the Rand Corp., a nonprofit global policy think tank.
When the federal student loan payment pause ends after Jan. 31, 2022, repayment will be especially difficult for certain groups of women who saw their earnings plummet, experts say.
Student debt was already a greater problem for women
Although women surpass men in degree attainment, women also have more student debt. A 2021 analysis of federal data by the American Association of University Women showed women carry an average student loan burden of $31,276, about 7% more than men.
Once women enter the workplace, they’re less able to pay off that debt due to earnings disparities as a result of gender and — for Black and Hispanic women — racial wage gaps, multiple experts say.
“(Borrowers) accrue this debt, and then a thing like a pandemic appears, exposing issues that are already present,” says Dominique Baker, assistant professor of education policy at Southern Methodist University in Dallas.
Women could see their lifetime earnings reduced
Say you’re a woman in a partnered relationship with a man. You both work, but he earns more than you. When the pandemic hit, your toddler’s day care closed and your elementary school-age child switched to learning from home. The two of you couldn’t manage to take care of the kids and keep your jobs. Who can you expect to leave their job first?
“We have not made it so people can easily take time off or have more flexible schedules to also be able to care for others,” Baker says. “That creates an environment where women have had to slow down or stop their participation in the labor market while trying to care for others.”
It could take time for women to make a comeback: Nearly 1.66 million women left the workforce and did not return from February 2020 to August 2021, according to federal Bureau of Labor Statistics data.
Leaving the labor force for any period of time can have long-term effects on lifetime earnings, Edwards says. Slower earnings increases could make it more challenging to repay debt.
Women didn’t have to lose their jobs to be at a disadvantage
There were also changes in the way women work that could have lasting impact, experts say, including reduced hours, time off for caregiving and switching to more flexible or lower-paying jobs.
Now that employers know more about the details of employees’ lives thanks to video calls, Edwards adds, women with children may be perceived to be less committed to the job and could be passed over for promotions.
Women are often responsible for elderly relatives in addition to children and are expected to take off work 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’ endeavor, and if you’re not, it’s much longer and can be incredibly disruptive,” Nielson adds.
Women with debt and no degree are most at risk
Women who hold student debt but not degrees will be the most vulnerable to payment challenges come February.
It’s unclear precisely how many women fall into this category, but the majority of students who attend college take on loans, and nearly 40% of students do not complete their degrees within six years of entering college, according to data from the National Center for Education Statistics.
Taking on debt without completing college leaves borrowers carrying debt without the career opportunities and lifetime earnings benefits of a college degree. This can lead borrowers to miss payments and default, which has consequences like wage garnishment, damaged credit and loss of eligibility for federal student loan safety nets.
Find ways to get help with loan payments
When the student loan payment pause ends, all borrowers have options to keep their accounts in good standing and avoid default. That includes enrolling in an income-driven repayment plan — which sets payments at $0 if you’re unemployed — or requesting a payment pause (this time with interest).
You’ll need to contact your loan servicer to make changes to your payment plan. Keep in mind that your loan servicer may have changed during the payment pause. Make sure your current servicer has your most up-to-date contact information.
