2 Major Ways Student Debt Burden Is Robbing Women of Their Freedom
GOBankingRates wants to empower women to take control of their finances. According to the latest stats, women hold $72 billion in private wealth — but fewer women than men consider themselves to be in “good” or “excellent” financial shape. Women are less likely to be investing and are more likely to have debt, and women are still being paid less than men overall. Our “Financially Savvy Female” column will explore the reasons behind these inequities and provide solutions to change them. We believe financial equality begins with financial literacy, so we’re providing tools and tips for women, by women to take control of their money and help them live a richer life.
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In today’s column, we chat with Briana B. Franklin, co-founder, president and CEO of The Prosp(a)rity Project — a nonprofit empowering Black women with tools for financial literacy — about the student debt burden that encumbers many women and how this debt is impairing women’s ability to experience personal freedoms.
Women account for more than half of the total student loan debt in the U.S. According to the latest stats, 58% of all student loan debt — $929 billion worth of debt in total — is held by women. But why is it that women are bearing the brunt of the student loan debt burden?
“Women are striving to get into those doors and work opportunities [so that they can achieve] equity,” Franklin said. “We put a lot of pressure on ourselves to ‘play the game,’ so women are kind of overcompensating and going above and beyond. They’re not stopping at a bachelor’s degree — they’re getting master’s or becoming doctors to [safeguard] their job prospects.”
And they’re learning the hard way that getting higher degrees doesn’t always pay off. A recent Wall Street Journal report found that many master’s students — even those that graduate from elite programs — don’t end up earning enough to pay down their loans. And when women are saddled with extra debt, the costs can be more than financial.
Women May Delay Having Children Due To Their Student Debt
Financial barriers can bleed into lifestyle barriers. Many women may feel they are unable to reach certain life milestones because they are buried in tens of thousands of dollars worth of student debt.
“A lot of women, especially younger generations, are like, ‘Well, out of not wanting to bring a child into this world into poverty, I’m going to put off my child-rearing years’ — or they don’t even feel like they have the choice,” Franklin said.
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For some women, this may even mean never having children.
“Women are like, I’ve accepted I’ll be 60 or 70 when I have my [student loan debt] paid off, which is way past my time to start having children,” she said.
Women May Be Unable To Buy Homes Because of Their Debt
In addition to causing them to put off child-rearing — either by choice or out of necessity — student loans are also preventing women from becoming homeowners.
“Homeownership is suffering a lot because of our generation’s student loan burden,” Franklin said.
And this is a life milestone that has a long-lasting ripple effect. Not only can barriers to homeownership hurt current generations of women, but future generations as well.
“Just last night, one of our program members wrote me an email saying that she is trying to get a half-million-dollar home loan so that she can move her son — who is going to start kindergarten — into a better school district. They basically immediately took her out of consideration because she owes about $300,000 in student loans,” Franklin said. “The pain in her email was palpable. This woman is trying to set her next generation up and start him out with a better education, and it’s already proving to be such a challenge because of a decision that she made years ago to get all of those degrees.”
But Having Student Loan Debt Doesn’t Have To Steal Your Freedom
Although the situation may seem bleak, Franklin said that women should still feel optimistic about tackling their debt and regaining their freedom to do whatever they want in life.
“There’s so much literature out there that talks about student loan debt and how dismal it is, and in efforts to inform people, a lot of outlets are actually depressing people and making them feel that because the problem is so big, that they stand no chance of ever getting out of it — especially those on the extreme end of the spectrum,” Franklin said. “I want to emphasize that people do have more control than they usually feel. I know that it can be debilitating — I absolutely can speak from experience. My family actually had a borderline intervention for me when I started trying to get out of student debt because I made a complete lifestyle overhaul. I was prepared to sell my car, I was prepared to move in with my grandad who lived in a tiny apartment with his girlfriend.”
Instead of making major sacrifices, Franklin decided to start small and swears by the debt snowball method for getting out of debt.
“I put it in practice myself when I started my debt-free journey in August 2019,” she said. “Even though I’m not out of it yet, it helped me get a grip. I sat down and I created an Excel sheet with all kinds of debt — not just my student loans, but also my car payment at the time, my credit cards, my phone, which I had financed — and did it exactly as instructed: lowest to highest balance, the interest rate and the lender. I set a soft target for when I wanted to have [each debt] paid off to have some sort of motivation. Those dopamine hits that Dave Ramsey talks about are real! Once I paid off my $400 debt, I was like, ‘Oh my gosh, it’s gone.’ Then it was a $735 [debt], then after that, it was $1,100. It really is infectious to see that you actually can start the engine.”
For people with large amounts of debt, Franklin acknowledges that starting with small balances can feel like “trying to drain an ocean with a spoon” — but every little bit does count.
“Know that diligence and consistency can help make a dent,” she said. “It’s not for nothing, and your future self will benefit tremendously just from making that decision — deciding that you are going to change your life in that way. It’s not impossible, and I want our generation to feel like they still have control and the ability to live whatever lives they want — despite student debt.”
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