Senate Democrats lost their push to allow millions of students saddled with student loans to refinance at a lower interest rate as Republicans filibustered a bill, but the issue is likely to become a midterm theme and the latest front in the “war on women,” rhetoric that has been key to Democrats’ strategy so far.
The numbers are well known, especially if you are one of the 40 million who have student loan debt: Outstanding student loan debt totals $1.2 trillion, 71 percent of seniors who graduated college in 2012 have loan debt and the average debt for a bachelor’s degree is nearly $30,000.
But here’s another number — 82. That’s the average amount on the dollar that women make their first year out of college, relative to their male counterparts, according to the 2012 report “Graduating to a Pay Gap.” And what that number means for women with student loan debt, who tend to borrow the same amount as men for their education, is that their student loan debt can be even more burdensome.
That is part of the argument that Elizabeth Warren (D-Mass.) and other Democrats are making as they highlight what they say is the need for further reform, a move that has gained no Republican backing in the Senate.
The “war on women”rhetoric has, so far, worked to energize women voters.
“It is a one-two punch,” Warren said at a recent news conference. “Women take on big debts to go to college, but they have less money to pay off those debts.”
Warren introduced a bill that would allow borrowers with federal and private loans to refinance their debt at the lower interest rates that kicked in for new borrowers last summer, which would be financed by closing tax loopholes for millionaires, the so-called Buffet rule. It’s a non-starter with Republicans, who blocked the bill Wednesday, but underscores Warren’s emergence as the progressive populist standard bearer who wants to address income inequality by cracking down on big banks and Wall Street.
On Monday, President Obama signed an executive order that allowed 5 million student loan borrowers to cap monthly payments to 10 percent of their monthly income, regulations that likely won’t be implemented until December 2015. He also voiced support for Warren’s approach.
Here’s a rundown of some of the numbers according to the study, by the American Association of University Women (AAUW):
- In 2009, one year out of college, 20 percent of women working full time and repaying their loans were paying more than 15 percent of their earnings toward student loan debt, compared with 15 percent of men
- Among full-time workers repaying their loans one year after college graduation in 2009, just over half of women (53 percent) and 39 percent of men were paying a greater percentage of their earnings toward student loan debt than what we estimate a typical woman or man could reasonably afford to pay.
“The more we talk about things like pay as you earn and income based repayments, that is a way of dealing with the pay gap coming out of college because they are going to pay based on what they earn and it won’t take up as much of their pay,” said Lisa Maatz, Vice President of government relations for AAUW. “The thing with income based repayment is that it is good for men and women. It really adjusts for anybody based on their income, but it’s going to be particularly helpful for women because of the pay gap.”
In the Senate, Warren’s approach will continue to face tough odds — a Wednesday vote ended in defeat. But out on the stump, other Democrats will likely continue to push this issue as a way of drawing a contrast with Republicans, who object to what they see as the tax hike provision of the bill. Key to Democrats’ hopes of keeping the Senate are young voters as well as women.
Other Democrats quickly issued statements Wednesday accusing Republicans of protecting big banks and supporting loopholes for millionaires.
“With this vote, we show the American people who we work for in the United States Senate: billionaires or students,” Warren said.
Sen. Mitch McConnell, who Alison Lundergan Grimes, his opponent, said was “ignoring Kentucky students,” accused Democrats of political posturing.
“The Senate Democrats’ bill really isn’t about students at all, its really all about Senate Democrats, because Senate Democrats don’t actually want a solution for their students, they want an issue to campaign on to save their own hides this November,” he said.