The average student loan debt among borrowers is now over $40,000, according to the Education Data Initiative. Unfortunately, that means that a good portion of borrowers owe more than that, and, according to a new GOBankingRates survey, the majority of the borrowers who owe the most are women. The survey found that 11.5% of female student loan borrowers have over $70,000 in student loan debt versus just 1.6% of men.
In this “Financially Savvy Female” column, we’re chatting with Amy Ouellette, VP of product at Vestwell, about why women have higher student loan balances than men and what they can do to pay those balances down.
Why are women more likely to have high levels of student loan debt?
There are many reasons for women having higher levels of student loan debt, including gender disparities in certain fields and women spending more on graduate programs, which don’t directly correlate to higher-paying jobs.
More Women Go To College Than Men
In the United States, more women attend college than men. According to the National Center for Education Statistics, as of 2019, women comprised approximately 56% of all undergraduate students in America.
Women Tend To Enter Lower-Paying Fields Upon Graduation
Women tend to dominate in fields such as education, health professions and social sciences, while men are often overrepresented in STEM fields. These disparities in chosen fields can impact earning potential and debt levels. According to the National Science Foundation, in 2019, women earned just 38% of master’s degrees and 32% of doctoral degrees in science and engineering fields.
Women Are More Likely To Finish College, and It May Take Them Longer To Get Their Degree
Women are less prone to drop out of college, which is good for completion rates but means more loans for the additional years. If women are taking longer to complete undergrad, depending on the program, they could end up with more total debt and/or longer time living hand to mouth. Data from the American Association of University Women indicates that women have a slightly higher six-year graduation rate from undergraduate programs compared to men.
Women Are More Likely To Get Graduate Degrees
Graduate education often comes with substantial student loan debt. Women pursuing these degrees may accumulate more debt due to the cost of tuition and extended time in school. Women are more likely to pursue postgraduate education, which can include master’s, doctoral and professional degrees. This further contributes to disparities in educational debt.
Women Take Longer To Pay Off Their Debt
One contributing factor to women having higher student loan debt may be the extended time it takes them to pay off their loans due to various life circumstances, such as taking breaks for caregiving or part-time work.
What tips do you have for women who need to pay down over $70,000 in student loan debt?
Utilize budgeting apps and free online courses. Use budgeting tools to help you make spending decisions and allocate income to make progress on debt paydown. Apps, like You Need a Budget (YNAB), are really helpful to help you think through your spending decisions and keep you on track in real time.
Take advantage of employer assistance programs. There are two important employer benefits to consider. One, available today through programs like Gradifi, allows employers to make payments directly to your student loans. Check with your employer to see if they offer student loan repayment assistance as part of their benefits package.
The second is… newly permitted by law in 2024. From the SECURE 2.0 Act, employers count your student loans as if you saved to your 401(k) when determining their 401(k) plan employer match. In other words, if your employer provides this benefit, you can pay down your student loan and NOT miss out on your company 401(k) match. Since these are so new, many programs have not yet rolled out, but ask your employer if they’re considering it.
Survey methodology: GOBankingRates surveyed 1,021 Americans ages 18 and older from across the country between Oct. 12 and Oct. 16, 2023, asking 23 different questions: (1) How much did you spend on your pet in the last year?; (2) How much have you spent/are you planning to spend on Halloween this year?; (3) How much money do you spend on kid-related activities in a year?; (4) How much do you spend on average on your monthly utility bills (electric, heat/gas, water)?; (5) What spending/saving habits have you had to change in the past year due to inflation/rising prices? (Select all that apply.); (6) What was the biggest unexpected expense you had this year?; (7) How much do you currently spend on monthly car payments?; (8) Do you live in a single-income or dual-income household?; (9) In the past year, did you have to take on a side gig because of rising prices/inflation?; (10) How much do you bring home from your side job(s) each month?; (11) How much have your overall expenses gone up in the past year?; (12) What is your top financial priority to end 2023?; (13) What is the top way you’ve earned your money/gained wealth?; (14) Have you started financially preparing for 2024?; (15) How much have you spent on home upgrades in 2023?; (16) How will the resumption of student loan repayments affect your budget?; (17) How much do you currently owe in student loans?; (18) How much do you spend on yourself (not including housing, food, etc.) out of each paycheck?; (19) How much do you spend on online purchases per month?; (20) Where do you shop for groceries most often?; (21) Do you shop around for groceries to get better deals?; (22) What are you currently invested in? (Select all that apply.); and (23) What is the current value of your stock investments? GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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