A Women’s History Month feature. Read more stories of student loan debt here.
In this series, women spoke with NerdWallet about their relationship with student debt and their studies. They also shared their perspective on the debt gap between the sexes and a future when they’re finally free of student debt. This profile features Lourdes Arena, a 2009 graduate who estimates she has approximately $80,000 of student loan debt. She’s looking forward to paying off her debt so she’ll be free to pursue other financial opportunities.
More women than ever hold college degrees, but they face a more daunting debt burden than their male peers.
The number of American women 25 and older with a bachelor’s degree increased from 22.8% to 29.7% between 2000 and 2013, according to the Institute for Women’s Policy Research. Women may have more education than ever before, but they’re still earning less than men: Women with graduate degrees earn a median $29,000 less per year than men with graduate degrees and $5,000 less than men with just bachelor’s degrees, according to the institute.
Those lower earnings make it more challenging to repay student loans. One year after graduation, women’s student loan debt represented a higher percentage of their earnings when compared with men, according to findings from a 2015 study by the Institute for Women’s Policy Research, released by AARP. The higher proportion was true across all ethnic groups but was even greater for black women.
This is Lourdes Arena’s story.
Occupation: Import manager at Baron Francois, a wine wholesaler and importer in New York City
College: Bachelor’s degree in French language and literature at University of Maryland, College Park (2009)
Student debt: She estimates $80,000
Location: Jersey City, New Jersey
Arena says she’s embarrassed to admit she doesn’t know her exact student loans total. “I’m in the dark,” she says. “I know I have loans, and it’s definitely a combination of private and federal. My mom was the main co-signer of these loans, so I wasn’t very clear how the loans work.”
Arena attended community college for two years before paying out-of-state tuition at the University of Maryland, College Park. While in school she also studied abroad, and though she doesn’t regret this, it did increase her costs. After graduation, she deferred her loans while working in the service industry, saved enough to move out on her own and began paying more attention to her finances. “I’m not the best saver in the world, but … I hate the feeling of owing money, so I just want to get things paid off,” she says.
She now lives in Jersey City with her boyfriend and works full time in Manhattan at a wine importer. She also has a part-time job at a wine shop and stages wine tastings and parties with her company, Lourdes of the Vine. She says her side work supplements her lifestyle and helps her and her boyfriend save for their future.
On attending community college first: “I would have owed more if I didn’t go to community college and play sports and go for free for two years of my life, despite me not wanting to be home. Community college probably put me in a better position than most.”
On the student loan repayment gender gap: “It kind of makes sense. My boyfriend is four years older than me, he’s an engineering major, and he had student loans, too. He went to a state school, but he finished paying them within the last year. I wonder how different it would have been if I went to a state school.”
On a future without student debt: “I’d really like to own a house. I’d like to retire at some point. I’d like to be able to provide for my family and be financially secure, as supposed to being super-duper rich. I don’t desire to that, but I don’t desire to have debt either.”
How to make loan payments more manageable
Arena had struggled to make loan payments but is now on the right track to paying off her debt. If you’re having trouble making your monthly payments, you might want to consider these options.
Federal loan borrowers may opt for income-driven repayment, in which your monthly payments will be capped at a percentage of your income. Your standard 10-year loan will extend to 20 or 25 years. Private loan borrowers may benefit from student loan refinancing, in which your existing loan would be replaced with a new private loan with a lower interest rate. To qualify, you need stable income and a credit score of 650 or higher.
Both options have their drawbacks. With income-driven repayment, you’ll pay less each month, but you’ll end up paying more in interest over the length of the loan term. If you refinance federal loans, you’ll be giving up federal protections like loan forgiveness as well as payment options like income-driven repayment.
Arena’s is one of 44.2 million stories of student loan debt. For more on these women and additional stories of student debt woe and triumph, follow the “Female Faces of Student Loan Debt” series.