Is There a “Gender Debt Gap”?

Is There a “Gender Debt Gap”?

Authored by: Matt Palumbo

The alleged gender wage gap, an economic statistic that’s seemingly debunked more often than argued nowadays, has a new spin on it.

The topic of student loan debt has long been a hot button issue, and a new report revealing that women owe the majority of the nation’s student loan debt is pointing the finger at the wage gap. According to the American Association of University Women, women owe approximately $2,700 more then men at graduation, which obviously can’t be attributed to the wage gap (as they are just about to start their careers).

When it comes to total debt though, women owe $890 billion to men’s $490 billion, or 65% of outstanding student debt. Naturally, the authors think the correct percentage of debt owed by women should be 50%, for a 15 percentage point discrepancy. And for that discrepancy, the study blames the gender wage gap for affecting women’s abilities to payback debt.

It should be immediately pointed out that women owing the majority of student loan debt is exactly what one would expect in country where the majority of college students are women. Women make up 56 percent of college students, so 40% of the “gender debt gap” can be explained by that fact alone.

As for the other variables?

  • Women also outnumber men in graduate school by a similar margin as they do overall, meaning women (on average) are remaining in higher education for more years, and thus taking on more debt. Even a single extra year in college can means tens of thousands of dollars extra new debt (plus an extra year of interest accruing on outstanding debt).
  • As the NowThis video linked above admitted in their video blaming sexism for women owing more debt, women take on 14% more debt than men initially (before graduating, and thus before the wage gap could effect them).
  • As for why women have less money to pay back their loans, that has more to do with the choice of major, than the wage gap. Of the top ten highest paying majors, the only where the majority of graduates are female is nursing. All ten of the lowest paying majors are dominated by women. The overall trend is clear:


But could the wage gap still be playing a role? That’s unlikely for one reason in particular. Remember, the wage gap is a nominal gap in pay among all men and all women of all levels of education, different levels of workplace experience, competence, ages. The wage gap between recent college grads (in the same major/fields) however is almost non existent. According to the Federal Reserve Bank of New York:

Among recent college graduates, women earn roughly 97 cents on the dollar compared with men who have the same college major and perform the same jobs. Moreover, what may be surprising is that at the start of their careers, women actually out-earn men by a substantial margin for a number of college majors.

In fact, according to our estimates, newly minted female college graduates earn as much as, or more than, men in twenty-nine of the seventy-three majors.

So, there goes that excuse.

Hopefully the gender wage gap remains out of the headlines for at least another year before we need to beat this dead horse again, but I won’t hold my breath.


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