Recently, national attention has focused on a crisis — the student debt crisis. Congressional tax reform legislation threatens to eliminate the federal individual student loan tax deduction, tax graduate school stipends and university endowments. The Department of Education that is tasked with the responsibility to protect students and provides nearly $130 billion in loans and grants to 13 million students is rolling back regulations governing for-profit schools and predatory recruiting and lending practices.
This crisis disproportionately affects women. Women comprise 57 percent of those earning bachelor’s degrees from U.S. colleges and universities, but they hold almost two-thirds of the nations $1.3-trillion student debt. According to the recent AAUW (Association of University Women) research report, "Deeper in Debt," not only is the debt for women students larger, but also it takes on average two years longer for them to pay it off. This is due in part to the gender wage gap that leaves women with less income for repayment.
As a teacher and single mom of two college students, I personally know how the need for financial assistance for higher education affects entire families. Even with academic scholarships, my children needed to apply for grants and take on federal and private loans to be able to pursue their career dreams. Because of the gender wage gap my son was able to pay off his debt much sooner than my daughter. But, now that he is back in graduate school, in addition to my financial help, he must take out considerable loans to finish his degree.
Like myself, senior citizens across the nation are the fastest growing category of student debtors, while helping their children and grandchildren pay for increasing tuition and expenses for school. At a time of life when the majority of elders are retiring and living on fixed incomes, including social security, some are co-signing or taking on student loans for family members. Women are particularly impacted because of the gender gap in retirement savings, pensions and social security.
The Consumer Financial Protection Bureau estimates that the number of people past age 60 with student loans has increased by 20 percent in the past five years to an alarming $66.7 billion in 2015. Unfortunately, some seniors become overwhelmed and delinquent on their student loan debt, putting their social security income at risk. AAUW understands that many struggling borrowers, at all age levels, need to have the opportunity to customize student loan repayment and recommends that income-driven repayment programs should be streamlined to accommodate both federal and private student loans.
Women students also face additional challenges to their education. Debt and other expenses, including childcare, often prevent women from other pursuits, including graduate school. According to "Deeper in Debt," “students with dependent children make up about 26 percent of undergraduate students, and 71 percent of these student parents are women.” AAUW recommends that childcare and services for low-income students be strengthened so that parents can balance parenting with their education.
The college financial aid process is fraught with confusion, complexity and overwhelming paperwork for many eligible parents and students. A lack of financial literacy and confusion about federal and private loans, payment obligations, documentation and disclosure requirements can have future negative consequences.
AAUW is recommending a “Student Loan Bill of Rights” and Student Loan Ombudsman for Oregon that will help bring more transparency and understanding to the borrowing process.
—AAUW Update, a report prepared by members of the American Association of University Women, Ashland Branch, appears quarterly. For more information, go to ashland-or.aauw.net.