Women May Have Tougher Time Paying Student Loan Debt Due to Gender Pay Gap

Do smaller pay checks for women mean bigger problems paying off loans?


Women graduate from Kettering University in Flint, Mich.

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As the general election approaches, President Obama and Mitt Romney are working to win over every voting bloc they can. Most recently, the two candidates have been ardently courting the women's vote and those still carrying student loans. It might be worth the candidates' worthwhile to lump the two voting blocs together.

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Women receive a majority of the bachelor's degrees granted in the U.S., attending largely the same institutions and paying the same tuition rates for their undergraduate degrees as men. Given the pay gap between genders, there is a question worth asking: Since women are both concentrated in lower-paying jobs and almost universally earn less than their male co-workers, will they have a tougher time paying down their student loan debt?

Consider the case for a woman and a man with four-year degrees in the field of psychology or social work, an area whose graduates have among the lowest median wages, according to Georgetwon University's Center on Education and the Workforce. Assuming both graduates have an average amount of student loans—$25,250 for the class of 2010, according to the Institute for College Access and Success—if those are entirely Stafford Loans with an interest rate of 6.8 percent, standard repayment means monthly bills of around $300, according to the Education Department's loan calculator.

A woman with a B.A. in psychology and social work without a graduate degree brings in a median of $40,000 annually, compared to a man with the same credentials, who makes $52,000. Take-home pay can vary by state, but if this woman is single and childless and lives in Minnesota, for example, monthly income comes to roughly $2,600, versus around $3,200 for the man, which means a $300 monthly payment will take a much bigger bite out of that woman's paycheck.

"The issue that, on average, women make less than men with the same level of education is absolutely true, and its absolutely true that that means if they have the same amount of student loans, they are going to have more difficulty repaying them." says Sandy Baum, professor of economics emerita at Skidmore College and a policy analyst for The College Board. And women and men do tend to graduate with roughly comparable levels of student debt.

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The above example only begins to scratch the surface of the hardship brought on by student loans: Plenty of graduates make even less than $40,000, depending on their locations and occupations. Likewise, plenty of graduates will take out more than $25,000 in loans.

The pay gap can be wide even in the highest-paying fields. Women engineering grads earn a median of $62,000, while men earn $79,000. A $300 monthly payment may be easy for a woman to cover with that salary, but it is a much larger share of her paycheck than for her male counterpart.

However, given options like income-based repayment, it remains unlikely that a wave of women will suddenly default, says Baum. Still, paying off loans may be tougher for women than men.

The labor market for women is, for the most part, far less lucrative than that for men, says Anthony Carnevale, director of Georgetown University's Center on Education and the Workforce.

"The female labor market is like the suburban neighborhood skyline versus the big city," he says. "On average, women cannot earn more than $30,000 a year unless they go beyond high school, and if they go beyond high school, they've got to get a degree of some kind, and they'll always make the same amount of money as a male with one degree less than them."

That means that a college-educated woman will often make less money than a man who has been certified in a technical subject such as HVAC, says Carnevale. "Those men with just 14 months of education—no degree, just a certificate—they'll earn more than 40 percent of women with B.A.s."

That is not to say that the system is rigged against women.

Carnevale points out that many women with degrees in higher-paying fields tend to choose the lower-paying jobs in those fields. Women who are math majors, for example, are more likely to become math teachers, while men are more likely to go into other, more lucrative fields.