Why Women Take Longer to Repay Their Student Loan Debt

March 25, 2016

Connect Member

Writer at Credible, an online marketplace for student loan refinancing.


More than 40 million Americans today struggle with student loans, but a new study shows that student loan debt is an even heavier burden for women.

According to a recent report from the American Association of University Women (AAUW), “The Simple Truth about the Gender Pay Gap,” women not only take on more student loan debt to obtain a college degree than men, but they also take a longer time to repay that debt.

Among all 2007 to 2008 graduates who landed full-time jobs, men took out an average of $22,656 in student loan debt, paying off 44 percent of that debt by 2012, the report found. Women, in contrast, graduated with $24,126 in student loan debt, and had paid off only 33 percent of it four years after graduation.

Women still earn 79 cents for every dollar that a man is paid. After falling steadily since the 1970s, the pay gap has “barely budged in a decade,” the AAUW said in a tweet. “At the current rate, the gap won’t close for more than 100 years.”

The careers that women pursue may be partially responsible for the wage gap. More men choose to major in STEM subjects like math and engineering, which tend to pay more than careers such as, say, teaching. Women are also more likely to take time off to have and raise children.

But the wage discrepancy gets even more alarming when race enters the picture. African American and Hispanic graduates, who earn less than white women and men, managed to pay off less than 10 percent of their student loan debt during the time period studied.

However, there seems to be one exception: Asian American women managed to take out less debt than men (about $19,687) and pay more than half of it back within four years of graduation.

Since women take longer to pay back bigger debts, that means they’re also paying more interest over the life of their loans. For those struggling with student loan debt, refinancing can be a great way to save money. Borrowers who refinance their loans with vetted lenders through the Credible.com platform save $11,668 on average. It takes just two minutes to find out how much you might save.

Another option for borrowers who have federal student loans is to sign up for an income-driven repayment plan to help reduce monthly loan payments.

But how can society fix the problem once and for all? Higher education may be one way to level the playing field among students from different socioeconomic backgrounds. AAUW also has some recommendations for individuals, companies, and policy makers.

Women can learn to negotiate for better and fairer pay by visiting the AAUW’s website. The group also offers salary negotiation workshops that are designed to help women obtain better salaries, benefits, and promotions. Bridging the gender wage gap is a problem that is subject to much debate and, therefore, not likely to be fixed immediately.

Companies, too, can help narrow the wage gap by conducting regular salary audits and being proactive about equal pay initiatives. On a larger scale, policy makers could start by updating the Equal Pay Act of 1963. One proposed bill, the Paycheck Fairness Act, would provide incentives for employers, enhance enforcement efforts, and protect workers who protest against unfair salary practices.  

To learn more and see how you can play a role in the fight for fair pay, visit fightforfairpay.org.

Ariha Setalvad is a member of the DailyWorth Connect program. Read more about the program here.