Are Women Disadvantaged When It Comes To Paying Off Student Loans?
November 1, 2012

Here’s what it boils down to: more women go to college and graduate with higher education degrees than men. Yet the pay gap between the genders clearly affirms that, statistically, women are paid less money than their male peers. So women, as a percentage, are paying more for their education and are less likely to be compensated at a level that facilitates repayment of educational debt. A recent analysis of the latest nationally representative data performed by the American Association of University Women (AAUW) reports that the pay differential means that women must put a larger percentage of their salary toward student loan repayment.

According to the National Center for Education Statistics, using from data from 2005/2006, women earned 62% of Associate’s degrees, 58% of Bachelor’s degrees, 60.0% of Master’s degrees, and 48.9% of Doctorates; those numbers are projected to continue increasing steadily at least through 2017.

At the same time, the AAUW study, entitled Graduating to a Pay Gap, shows that women are currently making 82 cents on the dollar when compared to male counterparts. The study made sure to get an accurate comparison by looking only at graduates working full-time, one year out of college. The study also made sure to control for factors that are known to affect a person’s earnings, such as occupation, college major and hours worked.

“Student loan debt burden” is defined as the percentage of a person’s earnings that goes toward paying off student loans. The higher that debt burden is, the harder it is to pay off student loans, a state of affairs, which, as we know, can  become increasingly prohibitive and wreak havoc over a person’s life. Women have a significantly higher student loan debt burden than men. According to the AAUW study, on the comparable basis highlighted above, in 2009 47% of women were putting greater than 8% of their earnings toward student loan debt repayment. In contrast, only 39% of men put more that 8% of their earnings toward student loans.

The disparity here is pretty unsettling, but there are certainly ways to mitigate against the problem. Christianne Corbett, senior researcher for the AAUW, has several suggestions. She believes it would serve us to improve publicity for the government’s Income-Based Repayment plan. The number one complaint about the program is that not enough people know about it. It’s a repayment plan that can be of tremendous benefit for women with excessive student debt who don’t have the salary to match it. Corbett also supports conducting further studies of the pay gap, as well as greater pay transparency within the workplace. On top of Corbett’s suggestions, there are also student aid organizations that specialize in assisting struggling women and men to optimize their student debt.