Student Debt Holds Women Back From Big Purchases More Than Men

CREDIT: Wall Street Journal

student debt

CREDIT: Wall Street Journal

A new report has evidence that women with student debt hold back on consumption more than men: For every $200 more in monthly student loan payments a woman has to make, she is 4 percent more likely to delay buying a home, according to survey results of 2,616 people by NerdWallet and economics professor Ben Ho. A man in the same situation is only 1.4 percent more likely to put it off.

The analysis controlled for factors such as the amount of consumer debt respondents held, their levels of financial literacy and financial management, their aversion to debt, and others. In fact, men and women surveyed were equally financially literate. But while higher levels of education about finances didn’t impact men’s plans to buy houses, more literacy made women more hesitant.

Other research has found that overall student debt is holding recent graduates back from buying homes. The number of people under 40 who own homes fell by 4.6 percent at the end of last year, the largest drop since 1982. Beyond having less free income to spend on housing when graduates are paying back loans, they are also unlikely to be able to qualify for a mortgage.

But the burden may weigh even more heavily on women thanks to the gender wage gap. Even though men and women fresh out of college would appear to be incredibly similar in the eyes of an employer — they’re similarly educated, single, childless, lacking in work experience, and interested in working full-time — female graduates make $7,622 less than male ones on average. This holds true even when correcting for a number of factors, such as where they went to school, the grades they earned, and the number of hours they work.

And that gap holds true no matter how well educated women become. For every degree a woman earns, a man with the same degree will earn more. A man with a business degree will earn $1,417 than a woman with the same qualification, for example.

Women may not be able to factor in buying a house when they’re paying back student loans while making less than their male peers.