Closing The Gap

American women hold two-thirds of all student debt—here's why

Barnard College's graduation ceremony

Americans collectively hold over 1.5 trillion in student debt, but some students are shouldering more of the burden than others.

According to the American Association of University Women (AAUW), women hold roughly two-thirds of all student debt in the nation. As of 2019, women hold almost $929 billion in outstanding student debt.

A recent report from student loan refinancing company Laurel Road suggests that a major reason for this disparity is because women are less likely to understand how student debt works. In a survey of 1,000 college-educated adults, Laurel Road found that "Millennial women (35 percent) are more than three times as likely as their male peers (11 percent) to not have completely understood their financing options when applying to college."

But crediting the student debt gap to lack of understanding is an oversimplification — in many ways women are being placed in an impossible situation. Here are four reasons women hold more student debt:

Parents provide less financial assistance to daughters

According to the AAUW, upon graduation women owe $1,500 more than their male peers. A major reason that women are taking on more debt is that they are less likely to get a helping hand from their parents.

One study conducted by T. Rowe Price analyzed information from 238 households and found that 50 percent of households with only boys had money saved for college but just 35 percent of households with only girls did. Eighty-three percent of boy-only households contributed to college savings accounts monthly, compared to just 70 percent of girl-only households.

Boy-only households were also more willing to take on debt, more likely to send their sons to expensive colleges and more likely to cover the entire cost of college.

Roger Young, a senior financial planner with T. Rowe Price, tells CNBC, "Looking at the breadth of the results, it suggests there are some antiquated viewpoints on gender out there."

More women go to college

Today, women earn approximately 56 percent of all bachelor's degrees in the United States. As more women go to college, the collective total of student debt held by women increases. This means that some of the difference in the amount of student debt held by men and women can be attributed to the fact that more women go to college in the first place.

"It's encouraging that women are enrolling in college more than ever before, but at the same time they are taking on larger amounts of debt to pay for their dreams," says Kevin Miller, senior researcher at AAUW. "Because of factors like the gender pay gap, debt that could be manageable ends up becoming unmanageable, particularly for women."

The pay gap

Women on average earn 81 cents for every dollar earned by a man. For women of color, the gap is even wider. Earning a degree — or multiple degrees — is one of the few proven ways that women can increase their wages.

A 2018 wage gap report from the Georgetown Center on Education and the Workforce found that women must earn one more degree than men in order to overcome some of these disparities.

"A woman with a bachelor's degree earns $61,000 per year on average, roughly equivalent to that of a man with an associate's degree," says the report. "The same rule holds true for women with master's degrees compared to men with bachelor's degrees and for each successive level of educational attainment."

Financing graduate degrees, while often necessary for women, can be expensive. A study by the Brookings Institution states that "roughly one-quarter of the increase in student debt since 1989 can be directly attributed to Americans obtaining more education, especially graduate degrees." Their research found that since 1989, the average amount borrowed to finance a graduate degree quadrupled, from approximately $10,000 to over $40,000.

"Women face a catch-22," explains Miller. "Go to college and take on student loan debt but get a higher paying job or, alternatively, forgo college and avoid the debt, but be locked out of higher-wage careers."


The pay gap also makes it more difficult for women to pay off their loans as fast as men. As men earn expendable income, they are able to chip away at their debt. Women, however, are more likely to report not being able to cover basic living expenses.

In fact, the AAUW found that 34 percent of all women and 57 percent of black women who were repaying student loans were unable to meet essential expenses within the past year.

This budget crunch leads women to accrue more interest on their loans than men, which can balloon their debt over time.

"Women take longer to repay their loans than do men, in part because of the gender pay gap," says Deborah Vagins, Senior Vice President of Public Policy and Research for the AAUW. "Lower pay means less income to devote to debt repayment and puts women at a severe disadvantage."

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