Gender equity, student debt, and the pandemic 

As the events of the past year turned the world upside down, the importance of employee benefits has never been more evident, as many workers faced unprecedented financial challenges—not least of which because of crushing levels of student debt.

The benefits administration landscape begins to take on new significance if we look at student loan debt and the challenges of the COVID era in the context of gender equity. Consider the big picture:

• Women owe much more student loan debt than men. Student debt in the US has ballooned to $1.54 trillion, and the American Association of University Women (AAUW) shows that women carry nearly two-thirds of the balance, with black women carrying more debt than other women.
• Pay gaps make it harder for women to repay student loans. In 2020, PayScale found that when looking at the median salary for all men and women, women on average earned 81 cents for every dollar earned by men. Even when men and women perform the same jobs in the same regions with the same education level, women only earn 98 cents for every dollar earned by a man with the same qualifications. When looking at the pay gap between certain women of color and white men, the pay gap  often widens. For example, American Indian, Alaska Native, Black, and Latina women earned 75 cents for every dollar earned by white men.2 Pay gaps may contribute to women typically taking two years longer than men to repay their student loans, according to AAUW.
• The coronavirus pandemic has affected women disproportionately. Data from global charity Oxfam shows that women in the US are 1.8 times more likely to lose their jobs due to the pandemic than men. During the pandemic mothers on average added twenty extra hours of housework and caregiving responsibilities to their schedules each week. The 2020 Women and Workplace study noted Black and Latina women spent more time on household duties than white women and were also more likely to be the family’s sole breadwinners. In this context, it’s no wonder women are facing greater mental health strain and professional burnout.

These realities have created a challenging financial environment for women, which is why workplace benefits have the potential to serve a particularly positive role in the lives of women employees. Many benefits and diversity programs already include tools that can help women address the problems that are affecting them the most. 

Here are some ideas to help spark conversation and engagement:

Engage with employees on how your benefits offerings can help them with their financial challenges. In a 2020 Streetwise Report, E*TRADE found that women are more likely to say student loan refinancing and education reimbursements are the two most important employment benefits. One important way to help move the needle on the unique challenges some employees face is simply to start a conversation with diverse employee groups to consider their perspective and examine new ways to help them engage with their workplace benefits. 

Raise awareness of your financial wellness benefits programs. Women with student loans report greater difficulty than men in meeting basic living expenses, including emergency funds, retirement, childcare, housing, and major purchases. You likely already offer benefits that can help women employees address these challenges, but if they aren’t engaged with the programs, they’ll never know. Targeted communication and educational campaigns may help women employees better understand and utilize the benefits available to them through work—and help them make headway in their personal financial wellness journeys.

Tap into current legislation: The CARES Act has been extended until 2026—including provisions that remove tax barriers and allow employers and employees to participate in student loan repayment benefits. Under the law, employers can contribute up to $5,250 per employee per year for student debt without increasing gross taxable income. If you haven’t already looked into benefits such as student loan repayment, now may be a good opportunity to consider expanding your current program. 

Employees are increasingly turning to their companies for help addressing their unique financial challenges. When plan sponsors think holistically about these issues and help employees engage with their workplace benefits, it can have especially positive ripple effects for women in the workforce.

Kate Winget is Managing Director, Head of Participant Engagement and Experience for Morgan Stanley at Work and oversees the combined ecosystem of participants for Morgan Stanley at Work and E*TRADE across the product lines of Stock Plan, Retirement, and Financial Wellness. She continues to lead Gradifi by E*TRADE, which includes employer-sponsored student loan paydown and 529 contribution solutions; access to student loan refinance options, loan counseling, educational resources; and digital financial planning tools. She joined Gradifi in 2017 as the Director of Sales and rose through the ranks to Chief Sales Officer and Chief Revenue Officer. She brings more than 20 years of experience in financial services, technology, and benefits. Prior to joining Gradifi, Ms. Winget held management and leadership positions at several banking institutions, including First Republic Bank and PNC.