AAUW insights on women's college debt

The American Association of University Women, or AAUW, has provided a top-notch summary report on the special impact of student loans on women. Sadly, I could not get it to display in this blog. But, it is one of the BEST reports (only 4 pages) about the IMPACT loans have on female students.

Take the time to copy/paste the link below and SEE what I am talking about. You will want to reprint page 2, as it is a realistic budget for a recently graduated student with their first job. What an eye-opener!

https://www.aauw.org/resources/research/deeper-in-debt/

In case the link doesn’t work, here are the salient points to consider. I am also sharing their recommendations, with notations on where I concur or disagree.

#1- Close to 60% of all undergraduates are women, a complete reversal of the ratios seen on college campuses 50 years ago. What is not understood is why they borrow more money than undergraduate men. It’s not a lot, maybe 8-10%more, but is a true statistic. Sadly, it adds up over time and makes the bill higher for women in general today. I have heard it is because women’s personal products are priced at twice those of men, but that is just a thought.

#2- Where this hurts the most is in payback time. Women still average just 81 cents in earnings to every dollar a man makes. As a result, women have less discretionary funds to allocate to the repayment plans available. The page 2 budget chart shows this in starkly real numbers. Again, these are based on national averages but bear witness to a common reality.

In their conclusions, I concur with one recommendation but disagree with another.

They recommend an expansion of the Pell Grants. These are Federal grants to low-income students attending college. I concur that they have not been updated and need to be increased and re-worked. Pell Grants are the single greatest financial assistance available to underprivileged families. They have NOT kept up with the meteoric rise in tuition and other costs. They should be increased as a matter of fairness.

They also recommend across the board forgiveness of at least some part of all student loans for all current borrowers. There is no agreement as to a percentage or amount. Reluctantly, I can’t support that, unless there are tax credits/refunds for all who paid their way through school or for their children’s school for the past 40 years. This is a tough conversation, and I doubt this will happen politically.

I WOULD support a volunteer community service option where volunteer credits could be earned against the debt. Our communities would benefit, needed volunteer work would get done, and people could fit that option in their work and family schedules. In addition, I would support a “Go Volunteer For Me” account (a variation on the popular GoFundMe system.) Your friends and family could volunteer and “gift” or donate those volunteer credits to help reduce your college debt account. If strangers can give you money on a GoFundMe account, why not gift volunteer credits?

This next item is NEVER addressed by anyone, but it should be!

#3. Overhaul the financial aid paperwork as presented to families and students AT THE TIME YOU ARE BORROWING THE MONEY!! If you are borrowing any amount of money, you should be presented with a one-sheet explanation of what four, five, and six years of borrowing add up to. Then, you should be presented with a quality “guestimate” of your first-time full-time job salary to handle the standard repayment plans. Finally, every borrower should have to sign papers acknowledging they not only got a copy, but they understood it. Yes, these would be projections. But they can be done very well. Years ago, the car financing industry was required to use a standard format that indicated how much you were borrowing, the interest rate, your total number of payments, and the monthly total. It didn’t stop people from buying cars. It provided clarity. When students are borrowing as much for their education as some borrow for a nice car, shouldn’t there be a standardized guestimate of your monthly repayment plan?

I guarantee a proper, reasonable projection of loan repayments will open a bunch of eyes. Maybe, it will light a fire of motivation under the student and parents to make sure the work gets done and the degree is earned. Or, in some cases, it may be necessary to find another, less expensive path to that degree!

Thanks again to faithful reader Tempe Javitz for this excellent resource. Please share with friends!

Next week, let’s look under the big rock of elite college admission processes. All kinds of interesting things happen there!

Until Next Time,

All my Best,

Bonnie Burkett