Amid evolving news + uncertainty surrounding COVID-19, your financial needs are our top priority.
For individual financial information, click here.
For Small Businesses, including the Paycheck Protection Program (PPP), click here.

Why Student Debt May Be Worse For Women

June 13, 2019 · 5 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Why Student Debt May Be Worse For Women

According to the American Association of University Women , using data from the Department of Education, women currently hold almost two-thirds of the country’s student loan debt, nearly $929 billion of the total outstanding amounts of nearly $1.5 trillion.

That’s a shocking disparity—and, when looking specifically at people who complete bachelor’s degrees, it’s black women, the Chronicle of Higher Education reports, who hold the greatest amount of debt of “any racial, ethnic, and gender group.”

To add to the challenging situation, women who hold more than one degree tend to earn as much as men who hold one educational degree less than they do.

Because of this gender-based gap in salaries, women may have less disposable income, which means they typically need more time to pay back their student loans—which in turn means they’re often paying significantly more in interest because of their longer loan terms.

This situation raises numerous questions, including how women can get themselves out of education-based debt more quickly. This post will take a deep dive on those subjects and offer some tips that could help anyone facing student loan debt.

Average Student Loan Debt: Crisis in America

Before we delve into gender-specific information, the reality is that the average amount of student loan debt is troublesome for more than just women. Average student loan debt hovers around $28,500, and the amount of debt continues to grow.

Student loan debt in the United States, in total, is greater than all of the credit card debt in our country. It’s greater than the sum total of our car loans. In fact, it’s the second highest form of debt in the United States today, only behind home mortgages.

And, not everyone can keep up with their student loans payments, so it’s not surprising that many people are delinquent on them, or even in default. Lenders can define “default” in somewhat different ways; borrowers in the Federal Direct Loan program or the Federal Family Education Loan program, for example, are considered in default after missing nine month’s worth of payments.

Multiple consequences can exist for people with loans in default, including suffering from substandard credit, having tax refunds garnished and more. Your lender can sue you and, in some cases, you would also be responsible for court fees.

Delinquency can also have a negative impact on your credit, which can make it difficult to get a mortgage, a car loan, a credit card and the like. It may even be challenging to get utilities in your name or to buy homeowners’ insurance.

Student Loan Disparity: Why Are Women in Debt?

As AAUW.org (the website for the American Association of University Women) reports, 57% of today’s college students are female, which would by itself mean that more women have the potential to need more in student loans. But their report, titled Deeper in Debt: Women and Student Loans, goes much further in their explanations about why women owe more.

The cost to attend college, according to AAUW, has increased by 148% since 1976, while the median household income since then has only gone up by 21%.

This explains why increasing numbers of students take out loans to fund their education, although these particular statistics apply to men and women alike.

More specific to women, in 2017, T. Rowe Price shared study results indicating how parents who have only sons “are going to greater lengths to support their kids’ college education than parents of all girls.”

Parents of all boys were found to be more willing to save more, pay more, and borrow more funds to pay for their children’s education, suggesting that “antiquated expectations based on gender” may still be in existence more than we might realize.

Here are statistics from that report:

•  When it comes to money saved for their children’s education:

◦  50% of parents of all boys have saved some money

◦  39% of parents of all girls have saved some money

•  When it comes to contributing towards college:

◦  83% of parents of all boys give money at least monthly

◦  70% of parents of all girls give money at this regularity

•  17% of parents of all boys say they plan to cover all college expenses for their children, while only 7% of parents of all the girls say that.

•  When presented with this statement: “I would consider sending my kids to a less expensive college to avoid taking on student loans”:

◦  60% of parents of all boys agree

◦  72% of parents of all girls agree

•  When asked if they’d personally take on $75,000 or more in student loans to help children with college expenses:

◦  23% of parents of all boys would

◦  12% of parents of all girls would

This indicates that boys receive more familial help with college funding than girls. And, when women get jobs to help with college expenses, pay disparity can play a role in their overall ability to contribute.

Then, when it’s time for repayment, this gender pay disparity means that women often have less disposable income. Whether women have children or not, or take time off from work to be with them or not, a tighter financial situation can cause them to choose longer terms for their student loan repayments, which means they could be paying down their balances more slowly and pay more in interest, overall—neither of which is desirable for financial wellness, much less for growth of wealth.

Ideas for Solving the Problem of Higher Education Loan Debt for Women

AAUW shared a five-prong solution they believe will help facilitate college funding for women, which includes:

•  Congress should expand Pell Grant availability for students with low incomes to reduce how much they’ll need to take on debt to finance a degree.

•  Legislators, both state and federal, should boost funding for public colleges/universities and otherwise support ways to provide debt-free options for students.

•  Lawmakers, including the Department of Education, should make income-driven repayment options easier to obtain.

•  Institutions should provide services, including child care, and otherwise address academic and financial needs of female students.

•  Individuals should join organizations that support closing the gender pay gap.

There’s another way to pay down student loans more quickly: consolidating them and refinancing them into one low-interest loan. Not all lenders will consolidate private and federal loans together, but SoFi does. Here’s more!

Refinancing Your Student Loans

Refinancing your student loans into one at a lower interest rate can mean you could pay less, over the life of the loan. How much you pay overall depends largely on the length of your term. So, for example, if it would help with cash flow to have lower monthly payments, choosing a longer term can help—but that could mean you pay more in interest. If you’d like to pay off your debt sooner and pay back less, overall, you can select a shorter term.

And, since SoFi doesn’t have a prepayment penalty, if you choose a longer term and end up with extra cash through a raise or a bonus, for example, you can put that windfall toward your refinanced loan payment and help pay down your loan faster.

To find out how you could benefit from refinancing, you simply need to know your outstanding balances, plus the interest rates you’re being charged.
At SoFi, you’ll also have access to live customer support. There are no application fees. No origination fees. No prepayment penalties.

Whenever you’re ready to refinance your student loans, we’re here to help. It’s fast and convenient.


External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF SEPTEMBER DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE
FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Business Oversight under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SOSL18218

TLS 1.2 Encrypted
Equal Housing Lender