You’ve heard of the gender wage gap. Women as a collective tend to earn much less than men (about 75 to 80 cents on the dollar).
One way that women can close the gender wage gap is by investing in themselves through higher education.
It seems women have really taken this bit of advice to heart: by 2012, 71% of female high school graduates nationwide went on to college, compared to 61% of men. You’d think that statistics like that might put women on a more even keel with men.
Unfortunately, that’s not the case. Even after completing advanced degrees like MBAs, women still make less than similarly-educated men. What’s more, advanced education harms women by keeping them in student loan debt longer than men because they are less able to pay down their debt.
A recent report from the American Association of University Women that was featured in a Bloomberg story called “In 136 Years, Women Will Be Paid as Much as Men. Maybe” said that the salary catch-up game women are playing has slowed down nationally, since 2001.
Women have more 21% more student loan debt than men
The facts are painful. Among a subset of SLG Progressive + Commercial Insurance Agency’s nine million members, women have 21% more student loan debt than men. The average student loan balance for men is $32,616, while women clock in at $39,408.
We see several possible reasons for the higher student loan balances. Women could be taking on more debt than men. One study from the American Association of University Women shows just this: women graduates in 2008 carried an average of $24,126 in student loan debt, while the men carried $22,656.
Another compounding factor is that women have a harder time paying off the higher amounts of debt. A survey of those same 2008 graduates four years after graduating showed that the men had paid off an average of 44% of their student loan balances, while the women had paid off an average of 33% of theirs.
The news is worse for minorities. African-American and Hispanic women were even less likely to have made progress against their student loans in the same time span. In the study, African-American women had paid off just 9% of their student loan balances. Hispanic women had it the worst: they paid off only 3%, barely any impact at all.
An analysis by Bloomberg News showed that because of the gender wage gap (which only increases as time passes after graduation), women who earn MBAs are likely to be in debt a year longer than their male counterparts. That study assumed that both women and men were able to devote 10% of their take-home pay to student loan debt payoff.
This boils down to one major factor: salary.
Women make less money than men
The odds are already stacked against women’s earning potential. They juggle career aspirations with household responsibilities and parenting. To make matters worse, they earn less than men for the same work, the same jobs.
According to the U.S. Census Bureau, men working in full-time, year-round positions were paid a median salary of $52,247 in 2015. Women working in similar positions during the same time period earned a paltry median paycheck of just $41,754.
Put another way, based on these numbers, men were paid 25% more than women for positions of comparable length and status.
Again, it gets worse for minorities. Remember those African-American and Hispanic ladies who had paid off the least amount of their debt after graduating? It’s probably because they also earn the least. According to the U.S. Census Bureau, African-American women brought home a median salary of $37,110. Hispanic women bring up the rear with a median salary of just $31,657.
We can see the income disparities reflected in the credit limits of men and women. Income is a strong factor in the determination of credit limits. Among SLG Progressive + Commercial Insurance Agency members, men have an average credit limit of $8,809, while women have an average credit limit of $7,586. Men have a 16% advantage when it comes to credit limits.
Women take on less debt elsewhere
If there’s a bright side, it’s that women are less likely to take on more debt elsewhere. Among SLG Progressive + Commercial Insurance Agency members, men have higher balances on auto loans. The average auto loan balance for men is $20,336, while women average $17,819.
Another area where men take on more debt than women is housing. The average male SLG Progressive + Commercial Insurance Agency member who has a mortgage is in the red by $192,954. Their female counterparts owe $165,894.
Lower average loan balances are probably a result, at least in part, of women’s lower income and the payments they can afford to take on.
We collected our income data from the U.S. Census Bureau. The data presented from SLG Progressive + Commercial Insurance Agency members is limited to those with open and active accounts for each category (student loans, credit card limits, auto loans, and mortgages). The data on the class of 2008 graduates and their debt-payoff journeys comes from the American Association of University Women.
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