How the Student Debt Crisis Impacts Women and BIPOC Disproportionately

Updated: Oct 19, 2021

Over 45 million student loan borrowers owe a collective amount of over $1.5 trillion in student debt. As of 2019, student loans have exceeded all other debt categories except for mortgage and auto loans. Economists prognosticate this debt to accumulate to $2 trillion by 2021 and eventually increase to over $3 trillion by the end of the next decade.

Several factors contribute to the student loan debt in the U.S., one being the rising cost of higher education. The average cost of tuition, fees, and room at a public undergraduate institution has increased $11,320 from 1980 to 2019. Furthermore, the mean tuition fees for private colleges has increased by 25.3% since 1978. Although there are 529 college saving plans to help students pay their college expenses, only 21% of families use them. Instead, many families would rather borrow money to pay for college. The two main reasons why many prefer a loan over a saving plan is because many are uneducated about these plans, and many need the money urgently for college.

There are two main reasons for rising tuition costs. One reason is that federal, state, and local governments spend massive amounts of money on colleges, academies, universities, institutes of technology, and many more; this spending increases the cost of tuition. In 2017, they spent a total of $172.4 billion on higher education. In addition, for every $1 the federal government spends on higher education institutions through loans and grants, the tuition costs for these schools increases by 15-60 cents.

The other reason why higher education is costly is due to its growing demand. The number of students applying to college has increased, causing seats in colleges to also increase. For example, Princeton University, an Ivy League school, admitted 1,585 students during the 2002-2003 school year, compared to the 1,896 students admitted during the 2019-2020 school year. Therefore, colleges increase their tuition costs to pay for the expenses of a larger student body.

Another factor that contributes to the high student loan debt in the country is the temptation for loan forgiveness. The Public Service Loan Forgiveness program helps students get rid of their student loan debts by allowing them to pursue a career in public service. Many students may lean on this program to get rid of their student loans. However, this program is not permanent and can be canceled or removed, which can leave many students at risk of not paying their loan debts.

Although student loan debt affects many people in the United States, it disproportionately affects two populations.

Women owe two-thirds of our nation’s student loan debt, an amount of $929 billion. Additionally, in 2016, the average woman left her undergraduate institution with a debt that is $2,700 higher than that of a man’s. There are three reasons as to why women owe more money than men: more women attend college than men, women borrow larger loans than men, and women are paid less than men.

In 2015, 72.5% of females who had just graduated high school were enrolled in two or four-year colleges, compared to 65.8% of males. Moreover, as of January, women obtained about 57% of all bachelor’s degrees from colleges and universities in America. Not only do more women attend college but according to a study conducted by the American Association of University Women (AAUW) from 2015-2016, female college students take on student loan debts that are 14% higher than male student loan debts. A potential explanation as to why females borrow more money than males is that boys save more money in college funds than girls do.

Female graduates are paid 74% of their male counterparts, making it more difficult to pay back their loans. Additionally, according to a report in 2016 by Desmos, a white woman pays off 28% of their student debt over 12 years, whereas a white male pays off 44% of their debt over the same period. Hence, females take more time to pay off their student loans than men do.

Women are not the only group of people impacted by the student debt crisis. Blacks, Indigenous people, and people of color (BIPOC) are also affected by the situation.

On average, a Black bachelor graduate has student debt of $52,726, compared to $28,006 for a white bachelor graduate. In particular, Black women borrow an average amount of $37,000 whereas a white woman borrows $31,346. Even though 76-80% of African American and American Indian/Alaska Native students receive financial aid, compared to 71.2% white Americans, 86.6% of African American students borrow federal loans to attend four-year institutions, in comparison to 59.9% of white American students.

A reason why BIPOC communities pay higher student loans than white Americans is the racial wealth gap. In 2015, non-white households have a family wealth of $0-50K whereas white Americans have a family wealth of $150-200K. BIPOC are also more commonly unemployed than white Americans. As of 2020, African, Hispanic, and Asian Americans in the ages 25-34 — the primary age when most students start paying off their student loans — face unemployment rates of 15-16% while white Americans face unemployment rates of 12.4%.

Because BIPOC communities have lower unemployment and pay rates, they borrow more money than white Americans. From 2015-2016, African American and American Indian/Alaska Natives had a loan borrowing rate of 83-85% for a Bachelor’s Degree, compared to 67.6% of white Americans. As of 2018, 71% of African American students still had to borrow federal loans to pay for their four-year institution, compared to 56% of white Americans.

Overall, the student debt crisis has impacted women and BIPOC disproportionately. Females and people of color borrow more money than white Americans, causing them to pay off their debts in a longer period. The national student debt is increasing and does not seem to be falling throughout the rest of the decade.

Through Teen Lenses: What do you know about the Student Debt Crisis and how do you think it impacts women and BIPOC?

“Honestly, I don’t know any statistics or specific data regarding the Student Debt Crisis. I do know, however, that many people spend their whole life paying back their student debt after college. Their prime years after college, when they should be working towards building their future, are spent towards paying back college fees. I think this impacts people regardless of color, race, or sex, but in some cases, women and people who are black, indigenous, or people of color, do sometimes face unfair discrimination while paying back their debt. Some are robbed of their future because of their sex or color based on the prejudice of others. They don’t get equal opportunities like others to pay back their debt and are forced to pay back their debt for the rest of their lifetime. (Many factors, such as short notices to pay back debts, or an insane amount of money to pay back are a few examples of unfair circumstances set on people of color or certain sex.) So the Student Debt Crisis, in my opinion, affects people in different ways according to their circumstances, who they have to pay back, and if those people have any prejudices.” – Aadya Nair, 16, Rising Junior at South Lakes High School, Reston, VA
“Well, I know that the student debt crisis is impacting a lot of people and it limits people’s options for future education. As a person who aspires to go into medicine – it really changes everything when you come out of school with 150K in loans. Just thinking about those loans means that I need to adjust things accordingly making sure that I can get as much scholarship money as I can to avoid that much in loans. Honestly, I think that’s why some people steer away from the medical profession because it tremendously impacts your life. And as a woman and a person of color who wants to go into a STEM associated field- I would like to hope that these factors don’t play a role negatively at times in college and medical school admissions but no one really knows. I have a lot of questions like will I be applicable for as many scholarships? Will there be some bias when I’m applying to these schools’ accelerated paths? But at the end of the day, I know that there’s going to be some disparity and that just means I’m going to have to work even harder to get what I want. ” – Krishna Tipparaju, 16, Rising Junior at Thomas S. Wootton High School, Rockville, MD
“The student debt crisis is the result of over 45 million students borrowing loans, who are currently in debt. Our government has shown little to no investment in higher public education, leaving post highschoolers and their families severely unfunded. A few groups such as the American Association of University Women (AAUW) have come forward to present their take on the situation and their solutions to overcome it, but there isn’t nearly as much support as would be needed to create a significant difference in the situation. This issue impacts women and BIPOC communities at a higher level of severity than White Americans and men because since the 1800s, females, and people of color face higher gender and racial wage gaps and have lower opportunities in education. This leaves more members of these two groups in debt, unable to pay off their student loan; because of this, members struggle to provide themselves with careers and promising futures.” – Srushitha Singiresu, 18, Rising Freshman at Virginia Commonwealth University, Richmond, VA

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