Why Women Hold Two-Thirds of All Outstanding Student Debt

Dylan Blatt on 18 September 2018

According to The Student Loan Report, the total outstanding student debt load of about $1.6 Trillion is spread across nearly 45 million borrowers. While the pressure of this crisis is felt by all 45 million of these borrowers, a full $1 Trillion of that total debt load is held only by women. Though not typically thought of as a women’s issue, the student debt crisis has clearly affected women more than male counterparts. Why has this happened? This post proposes a few potential reasons that sources have pointed to.

More Women Go to College, and Borrow More to Do So

The first part of this point is rather intuitive, being that women represent 56% of all college students, according to the AAUW. This disparity cannot, however, account for the entire 66% of student loans that women hold. 

The lack of equity points to women actually taking out more debt to attend college in the first place. In fact, the average woman left undergrad owing $21,619, while men averaged at $18,880, according to 2016 stats from the AAUW. Of course, people need to borrow more when they have less to put towards college. So why do women have less money to contribute to their education in the first place?

Families Save Less for Their Daughters’ Educations

In their analysis of this issue, the Wall Street Journal points to two studies that both resulted in the finding that families save more for their sons to attend college than they do for their daughters. 

One Study, which was conducted by personal finance experts from T. Rowe Price, found that 50% of families that only had sons had saved for their college educations, while only 35% of families that only had daughters had done the same. The study also found that parents of son-only families were more willing to take on debt for their children’s college, and more likely to cover the entire cost of college.

The second study, conducted by private student loan provider LendEDU, showed that nearly 10% more women were left to foot the entire bill of their college education than men. When forced to take out more debt than men, women will spend more of their adult life paying down the principal on that larger loan, all while fending off higher interest payments. This means that women will be in debt longer than men, however the principal amount of their loans is not the only reason for this.

The Gender Wage Gap

The fact that more women are borrowing to go to college, and taking out larger loans, is particularly troubling when you take into account the fact that they earn 27% less than their male counterparts once graduated, according to the AAUW. As women spend more time repaying the principal on their loans, they accrue more interest than men, becoming buried even deeper in the hole of student debt.

Kim Churches, CEO of the American Association of University Women puts these issues into perspective, saying “Education can be the great equalizer in our society, but if the rising tuition is impacting certain people more than others, it's now disenfranchising them."

Are you a woman with student debt? 

Take the first step towards giving yourself a leg-up and refer your employer to Goodly today.

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