Student Loan Forgiveness
- Filed under "education"
- Published Tuesday, September 6, 2022
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Last week President Biden announced that $20,000 of student loan debt for Pell Grant recipients would be forgiven, $10,000 for many other borrowers, that the federal student loan payment pause would be extended for all borrowers. This is significant, particularly today, as the cost of a college education rose 103% since 1987, while median household income rose only 14%.
Student loan debt has been a tremendous obstacle to reaching equity – both gender and racial. And women hold nearly 2/3 of the nation’s student loan debt. In 2021:
- Women hold an average of $31,276 in student debt, leaving them with a monthly loan payment of $307 the year after graduation. Given that women graduating with a bachelor’s degree expect to earn an average of $35,338—only 81% of what men anticipate earning—meeting that loan obligation is challenging at best.
- One year after college, women spend an average of $920 per month on housing, $396 per month on a car loan and, for the 16% of women who are moms, $520 on childcare, the report finds. Adding in that $307 student loan payment makes it difficult—if not downright impossible—to make ends meet.
AAUW recently issued an issue brief, The Perfect Storm, highlighting how a range of challenges including the pandemic, gender and racial pay gaps, and family wealth remains a significant barrier to women of color. AAUW notes: “Borrowers cannot plan effectively without knowing how long the payment pause will remain in effect, and $10,000 is not enough to make an impact for most women, particularly Black and Hispanic women and low-income individuals. Moreover, debt cancelation should extend to all borrowers without an income cap.”
To make a meaningful difference for American women, notes AAUW, the Administration must provide permanent solutions to canceling student debt and expanding loan-repayment programs. Utilizing an income-driven repayment formula is one solution – but there are certainly more, and the payment pause should continue as new programs can be developed.