First, the good news. Sisters are chasing that paper like nobody else. Compared to other ethnic groups, we hold the largest proportion of degrees relative to men of the same background. Over 50 thousand black students enrolled in grad schools for the first time last year—and two thirds of them were sisters. Black scholars are well-represented in fields like public administration and education.
This pursuit of higher education comes with a price, however. Next to mortgages, student loans now make up the second largest portion of personal debt in America. Attorney and entrepreneur Nadia Policard, 42, is a single mom of three teens. Not only does she face the prospect of paying for their college, but she also had to put her own student debt payments on hold following the end of her 16-year marriage and a corporate layoff. Struggling to fill the wide gaps that her limited child support didn’t, she amassed $45,000 in credit card bills in addition to her $83,000 loan balance. Weeks after her job loss two years ago, she had to borrow $60 from her oldest son to help pay the rent.
If, like many sisters on their grind, you are in constant panic because there’s never enough money from check to check to pay off education loans and fund your retirement, we get it. But, “when you’re 30 or 35, it’s too easy to say to yourself ‘I'll catch up later’ and then the next thing you know, you’re 50 or 55 with little to no savings,” says Lynette Khalfani-Cox, founder of AskTheMoneyCoach.com.
Some researchers term this too-familiar struggle “the middle-class squeeze.” Wages are stagnant, but the cost of housing, health care, tuition and more continues to skyrocket. For example, the cost of college soared nearly eight times faster than wages did between 1989 and 2016. Translation: From the time Gen Xers graduated college through the time we started writing checks for tuition for our kids, the selling price of a sheepskin has snowballed.
It’s no wonder student loan debt among adults age 50 and older accounted for $289.5 billion in 2018, up from $47.3 billion in 2004. Nearly 85 percent of Black bachelor’s degree recipients carry student debt, compared with 69 percent of white recipients, according to one report. The amounts we owe tend to be greater and we default at higher rates. The structural discrimination that impedes our ability to build generational wealth is a key reason, say experts. “This longstanding racial wealth gap accounts for the inability of most African American families to fund education without assistance,” explains personal finance educator Faneisha Alexander. She adds that the inability to pay these loans back can also be driven by the fact that women of color are often financially responsible for aging parents.
What’s a sister to do? Here’s what not to do, no matter what: Ignore the problem and default. The last thing you want is the feds garnishing your Social Security in your golden years. The first thing to do is realize that it’s not your fault and that you’re not alone. The second is to investigate and weigh your options.
With careful planning and belt-tightening, most of us can afford to shrink diploma debt and fatten our 401(k) plans. But you’ve got to be positive, proactive and purposeful about it, just like Nadia Policard is doing. With the five-figure credit debt paid off (thanks to taking a part-time job as a contract attorney and using some of her divorce settlement), she’s got a plan to erase her massive student loan debt over the next four years. “No matter how dismal your financial situation may seem, keep going and stay faithful,” she says. “Know exactly how much money you need to get to where you want be financially, work the numbers backwards from that point, then get to work.”
She can get there. So can you. “Sisters from AARP” turned to top money pros for their best advice: