Student Debt through the Gender Lens

September 01, 2017
Black ball and chain with the words "Student Loans" painted on them.

Image courtesy of Flickr user thisisbossi. (CC BY-NC-SA 2.0)

This story originally appeared in the summer 2017 Outlook magazine.

Over the course of the past few decades student loans have become an increasingly common means of paying for a college education. Most students who complete a college program now take on student loans, and the amount of student debt that students assume has increased as has the cost of attending college. At this time about 44 million borrowers in the United States hold about $1.3 trillion in outstanding student loans.

The scale of outstanding student loans and an increasing share of borrowers who fail to repay mean that many Americans have become aware of student debt as a challenge for society and for individual borrowers. But many do not think of student debt as a women’s issue despite the fact that women represented 56 percent of those enrolled in American colleges and universities in fall 2016. AAUW’s new research report, Deeper in Debt: Women and Student Loans, reveals that women also take on larger student loans than do men. And because of the gender pay gap women have less disposable income with which to repay their loans after graduating from college, so they require more time to pay back their student debt than do men. As a result, women hold nearly two-thirds of the outstanding student debt in the United States—more than $800 billion.

Summer 2017 AAUW Outlook Magazine cover art: The Student Debt Connection

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This article originally appeared in the Summer 2017 of AAUW Outlook magazine.

How did higher education in the United States—and women in college—end up in this situation? Within the past 50 years there have been a number of large shifts in American higher education. The passage of the Civil Rights Act of 1964, which outlawed discrimination on the basis of race and sex by federal and state governments, and the passage of Title IX of the Education Amendments of 1972, which outlawed discrimination on the basis of sex in federally funded educational activities and institutions, set the stage for an immense change in the demographics of college students in the United States. College students today are more diverse than ever. Once rarities who received but a small fraction of college degrees when AAUW was founded in 1881, women now earn 57 percent of bachelor’s degrees from American colleges and universities.

There have also been large increases in the representation of racial and ethnic minorities in college enrollment. Between 1976 and 2014 the portion of enrolled college students who were not white more than doubled from 16 percent to 42 percent. Though college enrollment increased across all race/gender groups in that period—the enrollment of white men increased by 3 percent—the larger gains were for women, especially women of color. White women’s enrollment in college increased by 2 million (47 percent) between 1976 and 2014, but black women’s increased by 1.2 million (214 percent), Asian women’s by 550,000 (610 percent), and Hispanic women’s by 1.7 million (982 percent). Women across all racial and ethnic groups are now more likely than men in the same group to earn a college degree. This educational advantage for women is one factor in slowly closing the gender pay gaps within racial and ethnic groups as well as the gap between all women and all men.

These changes occurred in tandem with broader changes in American culture, in gender norms for women, shifts in attitudes toward race, and the entry of women into the workforce in numbers comparable to men. However, this increased diversity within colleges and universities occurred alongside another change: a large increase in the cost of attending college. Though median household incomes in the United States have barely budged since 1976—and what little increase has taken place is due to the entry of women into the workforce, increasing the number of earners in the average household—the median price of college attendance has more than doubled within that period. This increase is occurring across both private and public institutions and reflects increases both in the price of tuition as well as the cost of room and board and other expenses. At the same time, Pell Grants—the primary source of federal grant aid for low-income students—have failed to keep pace with the increasing cost of college, and the maximum Pell Grant now covers less than 30 percent of the cost of attending a four-year college. The increase in the price of college, the stagnation in household incomes, and a lack of sufficient grant support have resulted in a situation in which students—especially low-income students—have no choice but to take on loans to bridge the gap.

Deeper in Debt: Women and Student Loans research report cover

Learn more about how student debt affects women in AAUW’s new research report, Deeper in Debt: Women and Student Loans

Unfortunately for borrowers, both federal student loans—which make up about 90 percent of the student loan debt being taken on in recent years—and private student loans are difficult to discharge in bankruptcy. This is intended to offset the greater risk of lending money to college students, who often have little or no earnings to make a traditional loan appealing. But it also means that student loans are a higher risk for the borrower, since there are only very limited circumstances under which federal student loans can be cancelled, discharged, or forgiven: death of the borrower (or student, for loans to parents of students); total and permanent disability; loans taken on to attend an institution that closed before a borrower completed the program; and loans received under fraudulent circumstances. In addition to these circumstances, federal loans can sometimes be forgiven under programs for students who make regular payments while teaching or working in public service. Both federal and private student loans are possible to discharge in bankruptcy only by convincing a court that repaying the loan would cause undue hardship, which requires arguing against opposing counsel representing the lender.

Women are now the majority of borrowers of these loans, as well as the majority of college students. AAUW’s analysis of federal government data in Deeper in Debt found that women are more likely to take on debt: 44 percent of female undergraduates take on debt in a year compared with 39 percent of male undergraduates. On average women take on more debt than men at almost every degree level and type, from associate degrees to doctoral degrees and across institution types; across degree levels women in college take on initial student loan balances that are about 14 percent greater than men’s in a given year. Though most students finishing a degree take on some amount of student loan debt, the gender imbalance in loans is reflected in students’ cumulative debt balances at graduation. Upon completion of a bachelor’s degree, women’s average accrued student debt is about $1,500 greater than men’s ($20,907 versus $19,454), while women completing an associate degree or credential take on $1,900 more than men completing those credentials ($9,338 versus $7,461). Black women take on more student debt on average than do members of any other group; black women completing a bachelor’s degree in 2012 graduated with an average debt of almost $30,000.

Cumulative student loan debt at completion of undergraduate degree or certificate programs by gender, 2004-2014 (Deeper in Debt Figure 4)

In Deeper in Debt AAUW also looked at federal government data tracking the outcomes of students after graduation in order to determine whether there is a gender difference in the ability of graduates to repay their debt. After graduating with a bachelor’s degree, women repay their loans more slowly than do men, in part because of the gender pay gap. Women working full time with bachelor’s degrees make 26 percent less than their male counterparts though the gap is smaller immediately after college (18 percent one year after graduation and 20 percent four years after). Lower pay means less income to devote to debt repayment. AAUW found that in the time period between one and four years after graduation, men paid off an average of 38 percent of their debt, while women paid off 31 percent, or 13 percent of debt annually versus 10 percent annually. The pace of repayment was particularly slow for black and Hispanic women, as well as for men in those groups. AAUW estimates that it takes women almost two years longer than men to repay their student loans as a result. Because women continue to make student loan payments longer than men, women may also get off to a later start on saving for retirement, investing in homeownership, or starting a business.

Perhaps unsurprisingly, making payments on student loans can make it more difficult to make ends meet for some college graduates. Graduates who are still repaying loans four years after college are less likely than graduates without loan payments to be able to meet such essential expenses as rent or mortgage payments. Women—especially women of color—are more likely than men to experience difficulties making ends meet—34 percent of all women relative to 24 percent of men. Most black women (57 percent) who were repaying student loans reported that they had been unable to meet essential expenses within the past year, the highest rate of any group.

Rate of student loan repayment for all borrowers who graduation with a Bachelor's degree in 2007-2008 broken down by race and gender.

Women’s greater difficulty in repaying student loans is also reflected in default rates. Defaulting on student loans has serious consequences: a ruined personal credit rating, being hounded by a collection agency, and the loss of eligibility for any future student loans. Default rates are higher for women than for men, and much higher for black and Hispanic borrowers than for white and Asian borrowers. Default rates are also higher for single parents, students with disabilities, and especially for students who do not complete their academic program.

Rates of default on student loans are particularly high among students who attend for-profit institutions. These institutions, which include both small technical and cosmetology schools as well as large shareholder corporations that operate online and across multiple states, are legally able to produce profit for their owners and shareholders and thus are motivated to extract profit from their students. Though for-profit institutions enroll a relatively small portion of American college students, these institutions disproportionately enroll women—about 65 percent of their students are women. For-profit institutions also disproportionately enroll people of color, low-income students, and members and former members of the U.S. military, and the students enrolled at for-profits take on student loans at the highest rate of any sector of higher education. These institutions use advertising and high-pressure recruitment tactics to woo students, but debt outcomes for students at these institutions are particularly dismal. Even after accounting for student demographics, and despite the fact that for-profit institutions disproportionately absorb federal student aid, these institutions have low completion rates and high default rates—a matter of serious concern for students and others.

Women hold nearly two-thirds of the outstanding student debt in the United States—more than $800 billion.

Another serious issue for those concerned with student debt is outcomes for students who leave college without completing an academic program or degree. The struggles of college graduates with student debt can be significant, but students who leave college without completing their academic program are more than twice as likely as graduates to default on student loans. While these borrowers may have amounts of debt that are small in absolute terms, their precarious economic position without a certificate or degree to improve their prospects in the labor market means that they may be unable to repay those loans: More than half of student debt defaults are on loan amounts of less than $10,000. An inability to repay even relatively small student loans that results in default means the loss of eligibility for future student aid, which may mean that noncompleting students are locked out of any future attempts to earn a college degree. As such, supports and programs to help students complete the programs they begin are a key strategy not just for improving academic outcomes but also for efforts to reduce default rates.

What else can be done to make changes to our student debt system in order to reduce the burden on women? Because women—especially low-income women and women of color—are disproportionately endangered by student debt, any strategy that reduces student loan debt is likely to disproportionately benefit women, but AAUW is advocating some changes in particular.

Federal Pell Grants are the primary source of federal aid for low-income students attending college in the United States and for many low-income students may be the only substantial nonloan aid they receive. Low-income students are disproportionately likely to be women and parents of dependent children, so strong support for Pell Grants means strong support for women: The maximum Pell Grant amount should be increased. And Congress should move Pell Grants to a mandatory funding system to ensure that students can rely on the program and that it is not subject to annual funding disagreements in Congress.

Income-driven repayment (IDR) plans are crucial for women to manage their debt because these plans allow struggling borrowers to customize their repayments to reflect their economic circumstances. The Department of Education has made progress in making sure borrowers have access to IDR plans, but AAUW advocates streamlining the many varieties of IDR plans as well as making it even easier for borrowers to enroll. Additionally, AAUW encourages Congress to allow refinancing of both federal and private student loans as well as supporting provisions to make student loans more easily dischargeable in bankruptcy for students facing the worst-case scenario.

Both the federal government and educational institutions can also take more steps to help students meet the costs of college other than tuition, such as the cost of child care for students with dependent children. Students with dependent children now make up 26 percent of undergraduate students in the United States, and many of these students struggle to find and pay for child care that meets their needs as students and parents. The federal Child Care Access Means Parents in Schools program pays for on-campus care for children of low-income students, and AAUW supports reauthorization and full funding of this program.

AAUW’s work in fighting the gender pay gap is a key part of the campaign to reduce the burden of student debt on women. Making sure that women are paid fairly and have access to the same career and advancement opportunities as men means women having paychecks sufficient to pay off their student loan debt. AAUW supports updating the Equal Pay Act to close loopholes in the existing law, as well as moving to eliminate salary history as a determinant of future pay.



Image showing the comparison between women's and men's student debt. Women owe $1500 more in loans than the average man does and will take two years longer to pay off.

Deeper in Debt: Women and Student Loans

Read the full findings and recommendations of AAUW’s research report.

Male and female college graduates in mortarboards walking to graduation ceremony

7 Women’s Stories of Student Debt

Read about how student debt has held these women back.

The Simple Truth about the Gender Pay Gap

Read AAUW’s quick guide to the pay gap and how it affects different women.

By:   |   September 01, 2017


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  34. Elaine Kresse says:

    Is there a video available for a branch to show on student dept. I don’t see one here on the website.

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