Gender penalty: Student debt and daycare stifle American mothers

Tatiana Macias wasn’t planning to get pregnant. She had just finished her master’s degree, and was excited about starting a career as a family therapist in Honolulu. Before having kids, she hoped to travel with her boyfriend, get married, and buy a home. But at the top of her goals list was starting to pay off the $100,000 she had racked up in college and graduate-school debt.

“I have always felt so burdened by having loans, but this was the only way I could attend higher education,” Macias, 36, told Al Jazeera. “I actually didn’t even want to get married until I had made a huge dent in my loan debt. But right as we were graduating, we found out we were pregnant. I freaked out because I felt so ill-prepared – and because I was broke.”

Macias and her partner, Roberto, 34, decided to get married two months later and work multiple jobs (they are both licensed mental health counselors) in order to save up. They couldn’t count on Macias’s salary during her seven weeks’ maternity leave. And since the United States is the only country in the developed world that does not guarantee mothers paid leave on a national basis, they would have to rely on Roberto’s income – plus about $250 per week in disability pay.

The pair stuck to a tight budget, sold their condo, and paid off their car loans and Roberto’s student loans. Their daughter Emma was born in January 2016, and a second daughter, Arianna, unexpectedly followed in June 2017.

The couple managed to get Macias’s debt down to $90,000. But in order for her to return to work full time (at a job that earned $58,000), the couple had to put their daughters in daycare.

At $1,200 per month, childcare for both girls is about a third of Macias’ monthly take-home pay, and her student loan payments are another third. That leaves just one third – plus her husband’s wages – for the mortgage, groceries and everything else, with barely any money for savings.

The longer it takes Macias to chip away at her student loan, the more she’s out of pocket because of interest payments – what lenders charge for borrowing funds.

“At this time, paying my student loan debt off is extremely crucial, especially so we don’t end up paying $200,000 with interest,” said Macias.

Disrupting life plans

Across the US, women face a similar calculus – and the highest education costs among member countries of the Organisation for Economic Co-operation and Development (OECD).

On average, tuition for a bachelor’s degree costs $2,364 per year in OECD countries. But in the US, the average is $10,230 for in-state public universities, $26,290 for out-of-state public universities and $35,830 private, nonprofit ones, according to the US College Board.

Female college students in the US are also more likely to take on debt for higher education than male students, and they take on more debt than men at every level and for every type of degree, a study by the American Association of University Women found.

With initial student loan balances that are about 14 percent higher than men’s – and a gender pay gap after graduation – it’s little wonder US women take about two years longer than men to repay their student loans.

All told, women hold almost two-thirds of outstanding student loan debt in the US, totaling about $929bn as of early this year. 

Women like Macias also take a financial hit when they take unpaid time off after giving birth. And when they do return to work, they pay an average $9,589 annually to childcare centres to get full-time care for a child up to four years old.

That childcare expense nearly rivals the cost of in-state college tuition, found a study by the New America Foundation.

Faced with the dual burdens of student loan debt and high childcare costs, some women delay having kids, drop out of the workforce after giving birth, or face ongoing struggles to make ends meet.

It’s a reality that sociologist and family demographer Karen Benjamin Guzzo of Bowling Green State University has seen in her research – and her own life. While she and her husband watched their friends have kids, buy homes and travel, it took them until age 40 to pay off their $100,000 in student loan debt from her PhD programme and his medical education.

Guzzo says student debt is one reason women are waiting longer to have kids (the birth rate in the US hit a 32-year low earlier this year).

“This is a huge burden for a lot of people,” Guzzo told Al Jazeera. “They’re delaying having kids, but they’re also delaying getting married, they’re delaying buying a house… [and] you can see how that just sort of ripples down the life course.”

When Guzzo’s first daughter was born in 2004, she and her husband found it “painful” to funnel $600 per month towards student-loan payments. And debt contributed to their decision not to put their daughter in the daycare centre on the campus where they worked.

“It was $1,400 a month, and our mortgage at the time was $1,000,” said Guzzo. “So I went for a much less nicer childcare place than I was comfortable with.”

Expected to do it alone

While working mothers around the world grapple with balancing careers and childcare, US mothers are unique in the way they are expected to do it all alone, said Caitlyn Collins, an assistant professor of sociology at Washington University in St. Louis and the author of Making Motherhood Work: How Women Manage Careers and Caregiving.

For her book, Collins spent five years interviewing 135 middle-class working mothers in Sweden, Germany, Italy, and the US and studying the policies each country has to support working families.

She found that while other developed nations emphasise free or subsidised higher education and childcare, the US falls short with “a complete privatisation of what it means to care-give and to raise children [and] be effective, responsible citizen, workers and taxpayers.”

“Families in the US are personally, privately responsible for providing the care necessary to raise a child to adulthood, and we are an outlier in that regard,” Collins told Al Jazeera. “[But] the rest of the Western industrialised world has figured out that children are a public good [and that] investing in them is our collective responsibility because we all benefit from them being raised well.”

In Sweden, families are expected to spend no more than three percent of their household income on childcare, Collins found. But in the US, families earning the median household income can expect to spend 18 percent of their earnings on childcare – a figure that rises to 64 percent for parents earning minimum wage, according to the New America Foundation.

That financial stress takes a toll on parents’ wellbeing, too. A 2016 study published in the American Journal of Sociology looked at the happiness of parents and non-parents in 22 OECD countries. Researchers found that “more generous family policies, particularly paid time off and childcare subsidies, are associated with smaller disparities in happiness between parents and non-parents.” Perhaps unsurprisingly, then, the US had the “largest disadvantage of parenthood” of any country studied.

It’s something Collins also qualitatively saw in her research on US mothers.

“These women were not only acutely stressed; they were also acutely guilty because they blamed themselves for all of this conflict and overwhelm,” Collins said. “They told me if they constantly worked a little bit harder, got a little bit more organised, maybe missed out on a couple more hours of sleep, downloaded the right app or read the article or listened to the right podcast, that this cascade of worry and stress would dissipate, and the reality is that’s just not true.”

Risk factor for poverty

When women drop out of the workforce to raise children, said Guzzo, it’s often hard to re-enter, and earnings sometimes never recover.

“The biggest risk factor for poverty in old age is whether you are a mother, because people don’t get any social security payments or credits when you are out of the labor force taking care of your kids,” Guzzo explained.

Both Collins and Guzzo said that making higher education more affordable, closing the gender wage gap and offering subsidised or free, high-quality childcare could all make a huge difference in the lives of US mothers and their families.

For Macias, free public preschool and on-site childcare for her daughters would be game-changers. “When they are sick, I have to miss work to be home with them,” she said. “My husband has been able to step in when I cannot. But it is still stressful, and causes a lot of guilt.”

Macias’s debt has caused her to put earning her doctorate on hold and to nix the idea of having a third child. And seeing firsthand the stress that debt causes has made her determined to teach her daughters financial literacy from a young age.

“I don’t remember anyone really talking to me about building good credit, or how to be smart with loans,” she said. “I don’t want them to make the same mistakes I did, and I want them to have tools and skills to be money savvy.”