The issue of student debt has been widely covered as a generational issue, plaguing millions of millennials and a currently expanding pool of Gen Zers. But what often goes unexplored is the way in which student debt is a gender issue, too.
Wiping out student debt would help level the playing field for women, both in the workforce and at home
Women hold two-thirds of student loans. They have borrowed more money because they go to college at a higher rate — since the 1990s, almost 60% of U.S. undergraduates have been female. Women have earned the majority of doctorate degrees for more than a decade. Women also pursue more credentials so they can win the same jobs as men, which increases their level of student debt.
For all these reasons, it’s important that student debt be forgiven entirely, not partially. A policy that cancels a limited amount of debt per person, such as the $50,000 proposed by Elizabeth Warren during the Democratic primaries, discriminates against women, because women hold more debt.
Student debt is sometimes thought of as an elite issue, affecting only those who attend expensive private colleges, but it’s not: Two-thirds of millennials have some kind of postsecondary training. Forgiving student debt will not disproportionately benefit the rich: People with means don’t allow their children to take out these predatory loans in the first place. Everyone who has one of these loans needs relief.
This gender equity issue can only be solved by government action. But it’s not just about goodwill. There are myriad reasons the government should be looking to lift this burden for the benefit of the whole U.S. economy.
Over the coming decades, the U.S. economy will suffer if we allow an entire generation to be burdened like this. The specter of debt will ultimately reduce the number of people going for postsecondary education, which will directly reduce national competitiveness. The debt will affect consumer spending, savings, and investment, because it will suck up all those dollars. It will also affect household formation, which will dampen everything from purchases of durable goods to housing starts. If we let this debt sit where it is, all these effects will roll up into one massive hit on American economic viability.
Unless it is canceled, student debt will have knock-on generational effects. In addition to discouraging some people from getting an education, the burden of debt will continue to depress the fertility rate: The main reason millennials postpone having children is that they can’t afford to start a family. A declining fertility rate can be a terrible thing for both economic and social well-being, because it creates aging populations. When the shrinking labor supply can’t keep up with the costs of social services — such as escalating expenses to support the elderly — growth slows and taxes rise. Women are already leaving the workforce to care for the elderly at higher rates than men, and a continuation of this trend would further depress labor force participation — and, therefore, GDP. The United States will be expecting this “sandwich generation” of women to care for both the old and the young, while also participating in the workforce. Yet by leaving extortionate debt tied around their necks, we make it impossible for them to do all that we need them to do.
Forgiving student debt will not disproportionately benefit the rich: People with means don’t allow their children to take out these predatory loans in the first place.
So, student debt forgiveness should not be viewed as a handout or an entitlement, but as an investment in future prosperity. When the Republicans gave billionaires a huge tax cut in 2017, they justified it by forecasting all the growth that would presumably come from the increased cash in the pockets of the rich. The investment value of canceling student debt should be forecast using the same procedure: by calculating the positive effects of housing starts and consumer confidence, as well as the negative effects that would be avoided, like lower savings and a less educated workforce — and then comparing the sum of all those inflows and outflows to the one-time expenditure that would be necessary to wipe the debt off the books. The economic wisdom of canceling student debt would be on much firmer ground than the thinking behind the tax cuts — and student debt is a one-time outlay, as compared to the billionaires who now get a tax break every year.
If the federal government can afford to give handouts to banks and billionaires, it can afford to prevent this demographic disaster. When a full cost/benefit analysis is done on the impact of student debt forgiveness, I think it will become clear that leaving this debt outstanding is not only heartless—it is economically absurd.
Just as women stand to be hurt disproportionately if the debt is not canceled, their futures would be made that much brighter if the government cleared this predatory nightmare from their path. For two decades now, women have enrolled in higher education 50% more often than men. Being set free to pursue their dreams in both work and family life will pay off their investment in education and, in the process, benefit the whole of American society.