Research Shows Trillion Dollar Student Loan Debt Crisis Hurts Economy, Falls More Heavily on Women Grads
National and State Research Shows Trillion Dollar Student Loan Debt Crisis Hurts Economy, Falls More Heavily on Women Grads
MADISON, Wis. — April 9th 2013 marks “Equal Pay Day”, the date on which the earnings of women in the workforce will catch up to those of their male counterparts for 2012. One Wisconsin Now Executive Director Scot Ross noted that research showing a dramatic gender gap in wages among recent college graduates means the burden of the trillion dollar student loan debt crisis is especially acute among recent female college grads.
He commented, “One trillion dollars in student loan debt is a bad thing for Wisconsin and the country. It is only made worse by that burden falling more heavily on women because of a gender pay gap.”
Original research by the One Wisconsin Institute showed student loan debt has a dramatic, negative impact on students and families and Wisconsin’s economy. Individuals with bachelor degrees with student loan debt were making average monthly payments of $350 on loans with an average term of nearly 19 years. Over $200 million in annual new car sales are lost as a direct result of student loan debt and households with student loan debt are significantly more likely to rent rather than own their home. In fact, the research found that over 85% of renters reporting solid middle class incomes between $50,000 and $75,000 were making student loan payments.
According to a study by the American Association of University Women, recent women college graduates earned 82% of what male graduates earned upon entering the workforce. Controlling for differing majors, occupations and other factors, women still earned only 93% of their male colleagues in the workforce after graduation. The result is that 53% of women, versus 39% of men, were paying more of their earning to retire their student loan debt than it was estimated a typical individual could reasonably afford to pay.
In Wisconsin, Gov. Walker and legislative Republicans have moved backwards on both the equal pay and student loan debt crisis, repealing the state equal pay law and increasing tuition at University of Wisconsin schools by $107 million in the 2011-12 session. In his proposed 2013 budget plan, Gov. Walker allows for unlimited tuition increases at UW schools while freezing student financial aid at 2010 levels.
“It is ridiculous that, in this day and age, such a dramatic gender wage gap continues to exist and we allow student loan debt to rob college graduates and our economy of prosperity. And it is an outrage that Gov. Walker and like minded legislators are not only failing to address these crises, they’re making them worse,” concluded Ross.