COVID-19-fueled unemployment and the student debt crisis disproportionately impact women of color.

Washington, D.C. — The COVID-19 pandemic exacerbated gender disparities and left millions of women in a precarious financial situation. Its disproportionate impact on Black women and other women of color reduced their ability to repay their outstanding student debt, according to a new report by the Center for Responsible Lending (CRL). The research studied focus groups with women who lost a job during the pandemic.

“We already knew that women of color bear the brunt of financial inequities. They have higher student loan debt balances and are charged higher interest. Because of persisting pay disparities, and little or no generational wealth, women of color have fewer opportunities to pursue a debt-free education or to withstand an economic or personal crisis,” said Sunny Glottmann, researcher at CRL. “This report confirms that women, particularly women of color, continue to struggle with their finances and student loan payments even as the economy begins to rebound.”

“Women carry about two-thirds of the $1.7 trillion of federal student debt, with Black women more than twice as likely as white men to owe more than $50,000 in undergraduate student loan debt,” Glottmann said. “Payment pauses are a temporary fix and don’t address longstanding issues within the higher education and financial systems. The only way to provide real, significant relief is to cancel $50,000 in debt and reform our educational system.”

The report painted a stark picture for women now and as they continue recovery efforts into the future. Key findings include:

  • Due to increased childcare responsibilities, as well as the high-contact, low-wage nature of many women’s occupations, women of color and women who could not work remotely have less job security today than pre-pandemic.
  • The economic gains made through 2021 were not shared equally across racial groups. Women of color continue to experience difficulty paying for necessities such as food and housing.
  • Student loan debt burdens remain at staggering levels, despite the payment pause. Black women and Latina borrowers typically have higher student loan balances than white women, making repayment more difficult.
  • Although the focus group participants found the student loan payment pause helpful, they worry about their ability to start paying again once payments resume.
  • Because of the difficulties faced repaying their student loans, women are reluctant to incur more student loan debt for themselves or their children.

CRL’s policy recommendations:

  • Cancellation: Provide across-the-board student debt cancellation of $50,000 per borrower, which would stimulate the economy, provide new jobs, increase GDP and help bridge the racial wealth gap.
  • Retroactive IDR Waiver: Implement a retroactive Income-Driven Repayment (IDR) waiver, which would help millions of borrowers who have spent time in default and are most impacted by predatory for-profit colleges, economic downturns and personal crises that require an exit from their workplace.
  • Improved collection and monitoring of relevant data: Improve the collection and monitoring of IDR and Public Service Loan Forgiveness data that could be used to track qualifying payments and older loans that are at higher risk for payment tracking errors and make that data publicly available. This will empower researchers to identify issues in real time and will help borrowers track their progress.
  • Invest in debt-free education pathways for women of color: Women of color have suffered the worst long-term financial impacts of the pandemic and have historically had fewer pathways to a debt-free postsecondary education. Federal and state governments need to invest more in public and private Historically Black College and Universities (HBCUs). The federal government should also double the Pell Grant, offer more internship opportunities to HBCU students and allocate more federal contracts for research purposes to HBCUs.


Press Contact: Vincenza Previte

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