July 25, 2021

Women’s Starting Salary Little More Than Average Student Debt

Women's Starting Salary Little More Than Average Student Debt


  • The American Association of University Women found women’s student debt burdens near their income.
  • Black women have more student debt than white women, highlighting the racial wealth gap.
  • AAUW recommended simplifying repayment options, which the Education Dept. is just now beginning.

Americans hold a $1.7 trillion student debt burden, but new data found that women bear a bigger portion of that burden, which is exacerbated by the gender pay gap.

The American Association of University Women (AAUW), a nonprofit that advances equity for women, released a new report that found that among those who take out student loans, women borrow an average of $31,276 while men borrow an average of $29,720. Women also have more difficulty paying off those loans, given that women who graduate with a bachelor’s degree expect to earn $35,338 their first year out of college — 81% of what men expect to earn.

Given the gender pay gap, and the amount of student loans women borrow, the report said it’s difficult, and sometimes impossible, for them to make ends meet.

“A year after college, women spent an average of $920 per month on housing, $396 per month on a car loans or leases and — for the 16.3% of women who have a child — $520 on child care, according to the most recent data,” the report said. “When you factor in an average of $307 per month on student loan payments, the numbers add up to an unsustainable budget.”

Black women hold more of the student debt burden than white women. According to the report, one year after graduation, Black women owe $41,466.05 in student debt, while white women owe $33,851.98. 

Women's Starting Salary Little More Than Average Student Debt

AAUW: Cumulative debt on women’s undergraduate loans, including principal and interest, one year after graduation by race/ethnicity.


American Association of University Women



In April, 36 civil rights organizations called for student-debt cancellation to close the racial and wealth disparities in the country that put borrowers “on the brink of financial devastation.”

AAUW recommended various measures to respond to this crisis, including cancelling student debt in an equitable way, simplifying repayment approaches, and eliminating the pay gap.

Insider previously reported that the Education Department is working toward improving student loan forgiveness programs, but the timeline for doing so, and details on what the improvements would entail, are vague. A department spokesperson told Insider that further details will be provided once the agency receives feedback from stakeholders.

“The Administration is committed to ensuring borrowers are able to access the loan relief to which they are entitled, and we look forward to working with the field to design and implement much-needed improvements,” the spokesperson said.

And given that women borrow more loans than men, and expect to earn less than men, the equitable debt cancellation that AAUW mentioned will significantly benefit women. The left-leaning Roosevelt Institute recently found that despite the popular argument that cancelling debt would benefit the rich, Massachusetts Sen. Elizabeth Warren and Senate Majority Leader Chuck Schumer’s plan to cancel $50,000 in debt per person would actually benefit the low-income borrowers more. 

“The time is now,” Warren told Insider last week. “We know what the problem is: student loan debt is holding back tens of millions of people across this country. People who can’t buy homes, people who can’t buy cars, people who can’t start small businesses. We need to cancel that student loan debt, not only for those people individually, but for our whole economy.”



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