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Student Loans Are Hurting Women More Than Men

By Maurie Backman - Jun 25, 2017 at 8:22AM

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Not only do women tend to borrow more for college than their male counterparts, but it takes them longer to pay off their debt. And it's a vicious cycle that can persist all the way into retirement.

It's no secret that our country is in the midst of a student debt crisis. Currently, a good 44 million borrowers owe a cumulative $1.4 trillion in student loans, and the average college graduate aged 20 to 30 is on the hook for a budget-zapping $351 a month in debt payments.

But while countless graduates are struggling to keep up with their student loans, it seems as though women are having the toughest time of all. In fact, a new report by the American Association of University Women (AAUW) reveals that not only do women rack up larger amounts of student debt than men, but because of the well-known gender pay gap, they take longer to pay off that debt. As a result, women hold nearly 67% of outstanding student debt in the country, and given that females represented 56% of students enrolled in college last year, that number is only likely to climb in the years ahead.

Female college student

Image source: Getty Images.

Women bear a higher debt burden

Though unequal pay is a heavy contributor to the student debt crisis impacting women, let's not ignore the fact that female students are more likely to take out loans in the first place. According to the AAUW, in a given academic year, roughly 44% of female students take out loans, compared to just 39% of male students. Furthermore, women enrolled in undergraduate programs take out $3,100 more, on average, than their male counterparts. And it's not a new trend by any means; women have consistently borrowed more than men for over a decade.

But even if women were to borrow the exact same amount as men, they'd still be at a major disadvantage with regard to repaying that debt, and it's all because of the wage gap. Currently, male workers earn a good 20% more than their female counterparts across a wide range of industries, but believe it or not, that income discrepancy starts as early as college. Though male and female students are equally likely to work during their undergraduate studies, women earn about $1,500 less per year than men during that time. And given that college students with work-study arrangements typically come in similarly qualified, and work a roughly equal number of hours per semester, that's a telling statistic right there.

Unfortunately, that pay gap only tends to widen once college comes to an end. Women with bachelor's degrees typically earn 18% less than their male colleagues as early as one year after college. By the four-year post-college mark, that gap expands to 20%. As a result, it takes women approximately 1.9 years longer than men to repay their student debt, during which time they're often forced to delay other savings efforts, such as retirement plan contributions. It's no wonder, then, that females are more likely than males to wind up cash-strapped during their senior years, despite being more likely than men to take advantage of employer-sponsored retirement plans.

Unfortunately, if recent history tells us anything, it's that we still have a long way to go until women can bank on being paid as much as men across the board. Therefore, let this be a lesson: If you're a woman, and you're planning to attend college, be judicious about how much you borrow, and if you're already on the hook for a pile of debt, focus on eliminating it as quickly as possible. Otherwise, your long-term financial goals might suffer.

Cutting your college costs

While it may seem unfair that female students, more so than males, need to make an extra effort to keep their college costs to a minimum, if you want to avoid a decade or more of unwavering debt, then you'll need to be sensible on the student loan front. Of course, the easiest way to stay out of heavy debt is to attend the cheapest university you can. If community college isn't an option, then stick to an in-state public university. In doing so, you'll save $15,000 on tuition compared to a public out-of-state school, or close to $24,000 a year compared to a private university. Commuting from home rather than living in a dorm will also shave a good $10,000 or more off your yearly costs, thus allowing you to keep your borrowing to a minimum.

If you're already in the position of having taken out student loans, your next best bet is to focus on keeping your living costs as low as possible, and using whatever extra money you can glean from your paychecks to chip away at your balance faster. The sooner you pay off your debt, the less you'll end up spending on interest.

Finally, be vigilant about saving for retirement, even if that means funding an IRA or 401(k) while simultaneously trying to knock out your student debt. Not only do women tend to outlive men, but they also tend to save less during their careers because of their lower earnings. And while retirement might seem way off when you're deep in the throes of student debt, the sooner you adjust to the reality that women just might have it harder than men on the whole, the better positioned you'll be to compensate not only during your college years, but during your career and beyond.

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