More Degrees, Fewer Dollars: The Hidden Cost of Women's Education Paths
A friend recently shared a meme showing two women sitting on a park bench discussing their adult children. The first woman said, “My daughter lives paycheck-to-paycheck.” The second woman replied, “Maybe she should get an education.” The first woman answered, “She has one. She’s a teacher.”
The Pew Research Center found women now represent the majority of college-educated workforce members, holding 50.7% of bachelor’s degrees. This is a milestone that has been decades in the making. Yet, despite the conventional wisdom that more education leads to more advancement into higher-paying positions, women still earn less than men throughout their careers.
More Education for Lesser-Paying Careers
This is partly explained by the degrees that women choose to pursue. Men still dominate undergraduate majors with the highest earning potential—think engineering and computer science or STEM degrees—while women continue to overrepresent in majors that typically lead to lower salaries, such as early childhood education and social work. According to a Bankrate study, nearly four in five (or 78%) of graduates with the 20 highest-paying bachelor’s degrees are men, while only one in five (22%) are women.
Making matters worse is that women take on more debt while pursuing a college education. A CNBC report found nearly two-thirds of the student debt in the U.S. is held by women. According to the American Association of University Women, among undergraduate students in bachelor’s degree programs in 2019-2020, 54% of men graduated with student loans, compared to 66% of women. Because women pursue low-paying degrees, it takes them longer to pay off that student debt, further impacting their financial lives.
WORTHwhile Considerations: Education often results in higher salaries and a lifetime of increased earnings. There is no doubt about that. However, education is not the panacea or great equalizer. The opportunity to impact change is to ensure young women understand the lifelong financial effects of education, career choice and debt. As they make decisions regarding schools and furthering their education, women need to understand options for career paths with the greatest growth opportunities, new graduate average compensation, the monthly student loan payment, and a realistic timeline of how long that amount will be deducted from their paychecks. Additionally, women need to strategically plan which university and or career paths within their field of interest will help set them up for the most opportunities and the least amount of debt post-graduation.