A recent analysis by the American Association of University Women found that a sizable majority of all student debt in the US is owed by women—$890 billion out of $1.4 trillion—while individual women with bachelor’s degrees graduate with an average debt $2,700 greater than that of their male classmates:
The newly-released data from the 2015-16 National Postsecondary Student Aid Study also reveal that:
- Women comprise 56 percent of enrolled college students, but hold 65 percent of outstanding student loan debt;
- 71 percent of women have student loan debt at bachelor’s graduation compared to 66 percent of men; and
- Black women graduate with the most debt – at $30,400 – compared to $22,000 for white women and $19,500 for white men. …
The analysis shows how the burdens become compounded by other financial factors – where women take two years longer than men to repay their student loans, in part because of the gender pay gap. Women with college degrees who work full time make, on average, 26 percent less than their male peers, which leaves women with less income to devote to debt repayment. Compared to white men with bachelor’s degrees, black and Hispanic women with bachelor’s degrees make 37 percent and 34 percent less (respectively) and struggle to repay their loans as a result.
The Millennial generation is already known to be struggling with an unprecedented burden of student debt, driven by the rising cost of college, the financial impact of the Great Recession, and other factors. The AAUW analysis adds a new dimension to this problem by illustrating how acutely it affects women (particularly women of color), in combination with the other factors that contribute to their disproportionate levels of financial insecurity.
These findings are worth noting in the context of the small but growing number of employers in the US who are incorporating student loan repayment benefits into their rewards packages. Our research at CEB, now Gartner, along with other recent research, indicates that candidates value these benefits highly, especially Millennials, and that student loan assistance is even more effective at boosting employees’ perceptions of their rewards than other education benefits like tuition assistance. Helping employees get out of debt faster improves their overall financial wellbeing, mitigates a major stress factor in their lives, and positions them to begin saving for retirement, which many employees can’t afford to do at the same time as they are making student loan payments (debt and financial insecurity are among the reasons why more older American women are delaying retirement).
In return, they can make the organization more attractive to candidates and encourage employees to commit to working there long-term in order to take full advantage of the benefit. The AAUW’s findings suggest that student loan assistance could have additional upsides for employers in terms of diversity and inclusion: If women and people of color are disproportionately affected by student debt, a program that helps alleviate that burden will have additional value for employees in these demographics. Indeed, our research at CEB, now Gartner, confirms this in the case of racially and ethnically diverse employees, who are 69 percent more likely than other employees to be interested in student debt reimbursement programs.
CEB Diversity & Inclusion Leadership Council members can learn more about how to use benefits to attract diverse employees here.