How Predatory Debt Keeps Women Out of STEM
About this event
Date: Thursday, May 26th
Time: 5:00-6:30 PM CDT
Location: Zoom (online platform)
Speakers: Tina Tang and Corei Flowers, from Debtless, an organization that aids student loan debt recovery.
Talking about debt is often thought of as a taboo topic. Yet, having conversations about debt and predatory financial systems could help women towards the collective action of removing financial barriers towards success.
To better understand debt and how it affects women in STEM, the Chicago Women in STEM initiative hosted Debtless. Debtless is a 501(c)3 non-profit with a mission to disrupt the predatory debt industry through debt forgiveness and financial education. The speakers for Debtless included co-founder Tina Tang and fundraising director Corei Flowers.
Tina began the session by discussing how unregulated the debt industry is and how easily your debt is bought and sold. Corei then moved the conversation into an open discussion on the different types of debt. In this discussion, Corei asked the audience to think about 1.) What are the different types of debt that exist; 2.) Do they affect different people equally? (hint:no); and 3.) Is there good versus bad debt? Examples of different types of debt highlighted included medical debt, payday loans, credit cards, car loans, student loans, mortgages, business loans, and personal loans. Additionally, the speakers emphasized that there is no good or bad debt from a moral standpoint. Debtless believes that everyone who is in any debt deserves debt forgiveness. Full stop. It’s the only way to make a path to financial freedom for everyone.
Next, Tina and Corei discussed how Debtless functions. The speakers explained that when debt gets sold, it usually gets sold as a portfolio for pennies on the dollar. These portfolios contain personal information that debt collectors often use to harass people. Unlike debt collectors, Debtless works on purchasing debt portfolios and forgiving the debt for the individuals in that portfolio. Debtless doesn’t identify the portfolios based on individual debts but instead based on debts such as payday loans and student loans, which often affect targeted groups. For example, one of Debtless’s first debt portfolios was valued at 2 million dollars but purchased for $2000. With only $2000, they could forgive 2 million dollars in debt for everyone in that portfolio. In addition to debt forgiveness, Debtless offers resources on its website to help individuals remain financially free.
Then, the speakers shared information on the different types of debt and explained predatory lending. Types of debt can include secured, unsecured, revolving, and mortgage. Predatory lending is fraudulent and deceitful, scamming borrowers into abusive terms that strip them of their financial freedoms with practices like:
- Hidden fees
- Imposing unreasonably high-interest rates
- Aggressively pushing borrowers into loans they can’t afford
Predatory lending is not limited to private mortgage loans. Predatory lending can also include student loans. For example, student loans fall under no collateral/guarantor, which means that legal action can be taken and result in wage garnishment. In addition, bankruptcy is often not a choice with student loans. Finally, federal student loans have no statute of limitations. Private loans have statute limitations, but not for disbursement, for when they can sue. This portion of the event closed off with a call to action towards #CancelStudentDebt.
The conversation then shifted to a focused discussion on how predatory lending affects women in STEM. Women make up only 28% of the science workforce and are often paid much less than their male counterparts. This uneven playing field can be worsened by women holding two-thirds of the national debt in private student loans. This debt can be a barrier to post-graduation or stop women altogether from pursuing advanced degrees in the first place. It is essential to recognize how intersectionality can play a role in how different groups of women are affected by debt.
To conclude the session, the speakers discussed actionable steps at the federal level to close the gap and promote financial freedom for all. The main topic of this discussion was how the #cancelstudentdebt could be particularly beneficial for women, especially women of color. For example, A 2020 study found that the median wealth for Black households would instantly increase by 42% with $75k student debt forgiven and 34% with 50k forgiveness. Yet, the speakers emphasized that the solution doesn’t stop at debt forgiveness. Debtless is focused on disrupting the predatory debt industry in more ways than one. These include providing better financial education and advocating for executive and congressional action.
In summary, financial success is key to the success of women in STEM, and action and conversations toward debt freedom are needed to move women forward.
Written by:
Jaqueline O. Rojas Robles
Ph.D. Graduate Student
The University of Illinois at Chicago