Study: Women Suffer More With Student Loan Debt

Wage gap makes loan repayment tougher for women, study finds

Members of Philadelphia Students for a Democratic Society protest near City Hall in Philadelphia, Nov. 14, 2008.
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Women earn less than men in the United States, but student debt is an equal-opportunity burden. Put these two facts together and the post-college job market suddenly looks a little scarier for women than men.

A new report from the American Association of University Women finds that as of 2009, women one year out of college on average earned 82 percent of what men one year out earned but had taken out roughly equal amounts of student debt, or about $20,000 each. In addition, women took out loans slightly more often than men­ — 68 percent of women borrowed for college, compared to 63 percent of men. As a result, young women moving from college to the workforce may have even less disposable income than the pay gap itself suggests.

According to the report, many analysts consider a student loan repayment burden of more than 8 percent of earnings to be unmanageable. Yet as of 2009, roughly 20 percent of women one year out of college were paying more than 15 percent of their earnings toward loan repayments, compared to 15 percent of men. Altogether, more than 47 percent of women were paying more than 8 percent of their earnings toward student debt in that year, compared to around 38 percent of men.

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"What that really means is that women have less money to live on beyond the pay gap," says Christianne Corbett, a senior researcher at AAUW and a co-author of the report.

That doesn't just mean fewer vacations and less grocery money for women. Less money to save may put women at a disadvantage immediately out of college for saving money and accruing wealth, whether that's via retirement accounts or putting money into a home.

So can women in college turn the situation to their favor? In some ways, yes. The report dissects the pay gap for recent college grads, finding that college major and occupational choice are just two factors that contribute to differences in pay.

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For example, graduates who majored in healthcare fields, education, humanities, math, biology and the physical sciences tended to have relatively equal annual pay by gender for graduates one year out of college in 2009. Other fields, like social sciences, computer science, business, and engineering, had broader pay gaps.

"If men and women have the same college major, do they make the same amount of money? The answer is sometimes yes, sometimes no. But women never make more than men. Men frequently make more than women," says Corbett.

Men also tend to dominate the engineering and computer and information science fields, which — though they feature pay gaps for graduates one year out of college — are are among the majors with the highest-paid college graduates, one year out of school, of both genders.

According to the AAUW report, women one year out of college still earned 6.6 percent less than men one year out earned in 2009, even when controlling for a variety of demographic, educational, occupational, and personal variables, including hours worked, marital status, geography, and occupation.

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"It's not something that individual women can combat on their own. It is such a long-standing systemic problem," she says. She points to Department of Labor figures that show that for the vast majority of occupations, men earn more than women.

"It's really something that has to be handled from the employer perspective," she adds.

Still, newly minted college graduates face a more even playing field than their mothers did. The wage gap continues to shrink, albeit slowly, and there is evidence that young women are catching up quickly. For example, one 2010 study showed that young, single, childless women were earning more than young, single, childless men across 39 of the nation's 50 biggest cities.

This was in part because women are increasingly getting more degrees than their male peers. Last year, the Census reported that women had surpassed men in earning advanced degrees. So while the systemic pay discrepancies that Corbett references may persist, better-educated women might continue to close the wage gap, even as they take on more debt to finance more education.