Student Debt’s Disproportionate Impact on Women’s Financial Wellness

Kate Winget, senior vice president, Gradifi, discusses the data that can empower employers to support solutions for women’s financial wellness.

We can have a profound influence on the overall financial wellness of our female employees, especially when we are open-minded in exploring the intersection of women’s financial wellness with student loan debt.

Understanding the ramifications student debt has in women’s lives can help plan sponsors make life-changing strides in their existing benefits and diversity programs. There is so much potential for human resources leaders to make a difference when we work together with a more holistic understanding of the challenges women face.

The landscape of benefits administration takes on a whole new shape as we start to think of women’s student loan debt and pay equity in context. Let’s consider the big picture of the disproportionate effect of student loan debt on women’s financial wellness:

  • Women owe much more student loan debt than men. Student debt in the U.S. has ballooned to $1.6 trillion, and the American Association of University Women shows that women carry nearly two-thirds of the balance—even though they represent just 56% of college students. Women of color are even more burdened: For example, black women owe on average $11,000 more than white men and $8,000 more than white women, according to Newsweek.
  • Pay gaps make it harder for women to repay student loans. Even though they hold the majority of degrees and jobs in the U.S., Payscale found that women in 2019 earned an average of 79 cents to each dollar earned by men. And the pay gap widens for minorities, as suggested by Equal Pay Day data. Pay gaps may be partly why women typically take two years longer than men to repay their student loans, according to U.S. News.
  • College degrees earn women less of a pay boost than their male colleagues. Comparing the same jobs, in the same regions, with the same education levels, Payscale found there is still a 2% gender pay gap—with many minority women making 4% less than white women. The gap widens in senior roles and for women with advanced degrees—especially MBAs. Moving up the ladder toward higher pay also takes longer for women, despite earning more than half of higher degrees.
  • Caregiving disproportionately affects women’s career advancement and wages. The charity Oxfam found that women are more likely to take time off work for caregiving, which contributes to gender and economic inequalities. Mothers also face a “mommy penalty” in their wages, while fathers typically enjoy a pay boost. Also, according to the Center for American Progress, women are 40% more likely than men to report feeling a negative career impact because of childcare issues.

All these factors converge to create a complicated financial picture. Women carry more student debt, earn less pay, enjoy fewer opportunities for professional advancement and feel more stress from personal finances and caregiving responsibilities.

But there is so much potential for plan sponsors to provide tangible, measurable support. We can take on the challenge to shape and share solutions for women’s financial wellness, and it starts with a few simple actions we can take today:

  • Introduce the topic of gender and student loans in your benefits planning conversations. E*TRADE found in our Q1 2020 Streetwise Report that women are more likely to say student loan refinancing and education reimbursements are the most important employment benefits. Is it time to consider how these benefits can help fill any gaps in service or support for your women participants?
  • Support the Employer Participation in Repayment Act (EPRA). The EPRA is proposed legislation that would remove tax barriers for employers and employees participating in student loan repayment benefits, much like a 401(k): Employers could make tax-free yearly contributions of up to $5,250 per employee for existing student debt, without increasing employee gross taxable income. Ask your company to join a diverse set of business, labor and education allies to endorse this bipartisan bill.
  • Address gender gaps in your financial wellness benefits programs. Women report greater difficulty in meeting basic living expenses, including emergency funds, retirement, child care, housing and major purchases, according to Newsweek. You may already have benefits that can help support women’s unique challenges, but are participants engaged? Are they making the most of your education initiatives? Are you providing targeted financial advice?
  • Discuss transparency in equity compensation and student loan benefits. The Society for Human Resource Management (SHRM) argues that the gender pay gap in most companies evaporates with wage transparency policies. Is there an opportunity to apply this principle to your equity compensation and student loan benefit programs? What would that look like?

With a clear vision for how our decisions as leaders in benefits administration can ripple out, shaking up profound solutions for women’s complex financial wellness needs, we are empowered and uniquely positioned to make a difference. For me, these eye-opening realities are catalysts for a more effective, mission-driven strategy. Knowledge is power when plan sponsors think critically and solve actively for the full context of women’s financial wellness needs.


As senior vice president of Gradifi, Kate Winget oversees the E*TRADE suite of financial wellness solutions including employer-sponsored student loan paydown and 529 contribution solutions, access to student loan refinance options, loan counseling, educational resources and digital financial planning tools.

This feature is to provide general information only, does not constitute legal or tax advice, and cannot be used or substituted for legal or tax advice. Any opinions of the author do not necessarily reflect the stance of Institutional Shareholder Services or its affiliates.