Student Loan Debt Bad? It's Much Worse for Women

NEW YORK ( TheStreet) -- Men who feel trapped by crushing student loan debt have one thing going for them: They're not women.

According to The Pew Research Center, about one out of five (19%) U.S. households owe student loan debt, with up to 40% of households headed by someone 35 or under owing some amount of student loans. But though the burden of loan debt affects a significant percentage of those under 35 regardless of demographic, it turns out that women are hurt more.

This is because though women and men pay the same amount for their college degrees, they do not reap the same benefits. A recent report by the American Association of University Women, Graduating to a Pay Gap, found that women are often paid substantially less than men upon graduation, putting a heavier burden of loan debt on women.

The study -- which analyzed Department of Education records of more than 15,000 recent baccalaureate graduates -- found that among bachelor degree recipients for 2007 and 2008, women earned an average of $35,296 at their first post-college jobs, as compared with men at $42,918. A pay gap of about 7% or more is evident even among women and men who majored in the same fields and entered the same professions. For instance, female teachers were found to have earned only 89% of what male teachers earned.

The report indicates that the difficulties women have in repaying student loan debt are dependent mainly on this pervasive pay gap and do not have to do with different levels of borrowing among men and women. In fact, the report found that women and men who borrow to finance their college educations usually do at similar amounts.

What the pay gap also signifies is that women are spending more of their salaries on loan repayment than men. Specifically, nearly half of women surveyed in 2009 -- that is, 47% -- were paying more than 8% of their earnings toward student loan debt as compared with 39% of men. This also not only leaves women with less disposable income on average than their male counterparts, but also less leftover funds to invest in savings and retirement plans.

"There's been a lot of attention paid to student loan indebtedness but very little focus has been put to the way debt impacts men and women differently," AAUW director and report co-author, Catherine Hill, told Forbes.

At the same time women suffer a pay gap after graduation, women are in greater need of a college education to ensure better career options and salary prospects.

A study by Ohio State University in the journal Gender & Society this year revealed that men without a college degree have better chances of finding a job (and a better-paying one at that) than women. The study also found that women were more likely to take out loans than men -- with 40% of women and 34% of men taking out loans annually.

"At least early in their careers, women suffer more than men if they don't have a college degree," said Rachel Dwyer, co-author of the study and associate professor of sociology at Ohio State University, in a press release. "Women will go deeper in debt to finance college because they need the degree more than men if they want to earn a good living. Men will drop out at lower levels of debt."

Additionally, the OSU study showed that men who dropped out of college got salaries competitive with male college graduates, at least in the early phase of their careers. Yet women who did not complete their degree program earned approximately $6,500 a year less than female college graduates. This discrepancy was consistent when controlling for other factors that can influence income, such as different fields and hours worked.

Dwyer noted that one reason men may be able to get jobs that pay a salary competitive with their college degree-holding male peers is that men can get jobs in better-paying industries that emphasize manual labor, such as construction, carpentry, auto mechanics and manufacturing -- ones women typically are not considered for or do not have easy access to.

So what would be the solution to addressing student loan debt disparity between the genders?

"What we need is policy with much stronger penalties against employers that are found to discriminate on pay," Hill said.

Until then, it would seem many women are stuck with a larger student debt burden than men.

If you liked this article you might like

Older Workers Bring Valuable Knowledge, Younger Workers Are Better at Learning New Skills

Older Workers Bring Valuable Knowledge, Younger Workers Are Better at Learning New Skills

Your Annual Income and What It Means to Be Wealthy in the US

Your Annual Income and What It Means to Be Wealthy in the US

The 1% Will Own Half of Global Wealth by 2016, but Oxfam Has a Plan to Even Things Out

The 1% Will Own Half of Global Wealth by 2016, but Oxfam Has a Plan to Even Things Out

The State You Live in Determines What Income You Need to Make it into the 1%

The State You Live in Determines What Income You Need to Make it into the 1%

Workers Who Don’t Feel Appreciated Suffer from Extra Stress and Discontent with their Jobs

Workers Who Don’t Feel Appreciated Suffer from Extra Stress and Discontent with their Jobs