Is There a Student Loan Gender Gap?

At first glance, it appears that student loan debt does not discriminate — today, 40 million Americans have at least one student loan account, with total loan debt at about $1.3 trillion. But new research suggests that women may actually have a harder time paying back these loans.

According to a study from the American Association of University Women (AAUW), based on data from the U.S. Department of Education, women who graduated in the 2007-08 school year have only paid off, on average, 33% of their student debt. Men who graduated that same year, meanwhile, have paid off an average of 44% of their student loans. And the difference gets even more pronounced for black and Hispanic women, who have paid less than 10% of their debt in the same time period despite working full time.

What’s Causing the Disparity?

Blame these struggles on the wage gap, AAUW said.

It’s been widely reported that woman today still earn only 77 cents for every dollar a man earns, and an earlier report from AAUW found that women who are one year out of college and working full time are paid, on average, just 82% of what their male counterparts are paid. This disparity in income can make it much harder for woman to achieve many of their financial goals — like buying a house, saving for retirement or paying off their college education, AAUW said. Moreover, the effects may be cyclical.

“The gap in debt repayment may also make it more difficult for women to take risks that could pay off in the long run, like changing job sectors or starting a business, further contributing to the pay gap as women move through the workforce,” AAUW said in a news release.

Dealing With Student Loan Debt

Unfortunately, addressing mountains of student loan debt — on top of a systemic wage gap — can be tricky. The escalating cost of higher education makes it difficult to avoid borrowing for college and, once on the books, student loans are very rarely discharged in bankruptcy.

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Still, beleaguered borrowers may be able to ease their burdens by looking into income-based repayment options, student loan forgiveness programs, default rehabilitation or, even, refinancing with a private lender. (Remember, if you are looking to refinance, you may want to check your credit. A good credit score can help you qualify for better rates on a new loan. You can see where you stand by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com. You can also go here to learn how to improve your credit, should your scores be in rough shape.)

And soon-to-be students may be able to keep the cost of college down by applying for scholarships or grants, working while in school or attending community college for their first two years before transferring to a four-year institution.