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The Student Debt Gender Gap: Why Student Loans Weigh More on Women

Elyssa Kirkham

March 8, 2019

For the 44 million Americans with student loans, dealing with this debt can be a heavy burden. But at the turn of mortarboard tassels during commencement, the idea of repaying student debt likely weighs more on the female graduates.

At least, research shows it should. While more women attend college and earn degrees than men, they hold a disproportionate amount of the student debt — two-thirds, in fact. The total balance of women’s student loans is a staggering $890 billion, according to the American Association of University Women (AAUW). Here’s a closer look at the statistics on women and student debt.

Women hold more college degrees — and student debt

In the past few decades, women have achieved some major wins in education. They’ve earned more bachelor’s and master’s degrees than men since the 1980s, and in the 2000s started to earn more doctoral degrees.

Today, women continue to pursue college degrees at much higher rates than men.

For the 2019-2020 school year, the NCES projects there will be 2.3 million more female college enrollees than men enrollees. Women earn 57.2% of bachelor’s degrees granted each year, earning 33% more of these diplomas each year, according to National Center for Education Statistics (NCES).

Women’s educational wins have come at a high cost, however. Female students at every level of education are more likely to borrow than their male peers. Among students who borrow, women’s student loan balances are 14% higher than men’s. The average student debt for women was $21,619 among those graduating in 2016, $2,700 more than $18,880 for men.

Educated women still earn less than men

Women’s higher rates of academic achievement have helped narrow the gender pay gap, but it still persists. Despite earning more for college degrees and achieving higher levels of education than their male peers, women are still earning less than men.

Women who earn a degree can expect to make the same pay as men with the next step down in educational attainment, according to a report from Georgetown University.

A bachelor’s degree will net a woman about the same pay ($61,000 per year on average) as a man with an associate’s degree (averaging $59,000), for example. And women must hold a master’s degree to achieve average pay approaching what men with bachelor’s degrees earn, with respective incomes of $83,000 and $87,000.

Additionally, women-dominated fields of study such as biology, psychology, and education continue to net lower pay. The average starting salaries of graduates holding female-dominated majors $38,125 out of college. That’s about 15% below the average median pay for college grads who graduated with a male-dominated major, at $44,104, according to the National Association of Colleges and Employers (NACE).

Repaying student debt is more of a struggle for women

Women are are more likely to have student debt, more likely to owe a higher balance, and can expect to earn less than the men walking with them at commencement. In short, they owe more on student loans yet earn less money they can use to repay them.

Clearly, the math doesn’t add up for female borrowers facing student debt. Indeed, research from AAUW shows that women are more likely to struggle with student loan repayment:

  • Women need two years more to pay off student loans than men.
  • Women one to four years out of college have repaid 31% of student loans, compared to men who have repaid 38%.
  • More than a third (34%) of female student loan borrowers face significant financial difficulties, compared to 24% of male borrowers.
  • Women of color are even more likely to experience difficulties. Among college graduated repaying student debt, 57% of black women and 44% of Hispanic women experienced financial difficulties.

The effects of student debt on women’s finances aren’t limited to the repayment period, either. Student debt can also set back other important financial goals in which women also trail men, such as investing and saving for retirement.

How women can pay down student debt faster

For women, these statistics on the gender differences of student loans can underline what they’re already experiencing firsthand: how hard it is for them to repay student debt and get ahead.

While paying down debt can be especially daunting for women, there are still things they can do. Here are some ways women can deal with student debt.

Choose wisely in college

If you’re still in school or considering heading back for an advanced degree, carefully consider the choices you make while enrolled. It’s a good idea to limit borrowing as much as possible by looking for other sources of funding for school such as scholarships or a part-time job.

On top of keeping student debt down, women should also consider choosing fields of study and majors pay more. This choice can help women access higher-paying industries, occupations and roles. Women who major in STEM subjects (science, technology, engineering, and mathematics) earn $840,000 more over their career than those who major in a liberal arts subjects according to Georgetown University.

Aim for higher pay

The focus on higher pay should continue post-graduation, too. Early career is when most college graduates have the most opportunities for advancement and income grows the fastest.

Female college graduates should take steps to achieve and sustain high pay as fast as possible. This means negotiating pay, pursuing high-paying occupations and titles, and angling for promotions and raises. Young women attain pay raises and promotions on par male peers, according to a Harvard Business Review study.

It all adds up to this: the years right out of college are crucial for growing income — and the more women earn, the faster they can pay down student debt.

Know your student loan options

Get a handle on your student loan repayment by learning about your options. Should you hit a financial rough patch, you won’t have to stress over how to stay current on student debt.

Federal student loans provide the most options for borrowers who are struggling with payments. Enrolling in an income-driven repayment (IDR) plan, for example, will reset payments to match your income and costs. If you’re facing a more prolonged hardship, such as unemployment or an ongoing health issue, you could also apply for deferment or forbearance.

You’ll have fewer options for dealing with private student loans, but some lenders can still offer help. Contact your lender as soon as you start struggling to discuss your options for managing payments.

Make a plan to pay off student loans

If you’re keeping up with student loan payments, it might be time to think about getting ahead of them. Paying more than the minimum each month is the best strategy to pay student loans down faster, and save hundreds or even thousands of dollars’ worth of interest in the process.

So figure out your plan to pay off student debt:

  • Look up student loan details. For each student loan account, find your monthly payment and due date, current balance, and interest rate.
  • Find funds for extra payments. Revisit your budget to see where you can free up funds to pay more toward student loans. From big expenses such as rent or transportation down to everyday spending, identify where you can cut back.
  • Send in regular extra payments. Once you’ve adjusted spending, use the extra funds to pay more toward one of your student loans. You’ll save the most if you pay off your highest-interest debt first.
  • Maintain your pay-off momentum. With enough extra payments, you’ll eliminate the first student loan you target. You can then “roll over” both the minimum and extra payments you were making to knock out your next student loan.

Weigh your own circumstances and priorities

Keep in mind that each of these options has trade offs.

IDR or deferment might provide relief now, for example, but slow down repayment and increase the total interest you pay. Making extra payments, on the other hand, can help you get out of debt faster and avoid interest — but it could require significant sacrifices upfront.

Additionally, paying off student debt is an important goal. But women, in particular, should beware focusing on student loan repayment to the exclusion of other financial priorities such as saving for retirement or building an emergency fund. Look at both the benefits and drawbacks of all options, pick priorities that match your own values, and find the right student debt strategy for you.

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