Our experienced financial planners often help parents tackle the arduous task of saving for college, so a recent study from the American Association of University Women caught our attention.
The findings boil down to this: though the costs of college are pretty much the same for young men and women, the latter are, on average, more burdened by student loan debt after graduation. The study attributes this in large part to an income wage gap between the genders: in 2009, college-educated women made 82 percent of men’s salaries one year after graduation.
The researchers went on to note that the extra debt young women face can affect a lifetime of other important commitments — such as marriage, motherhood, home or business ownership and even saving for their own retirement.
So, we often encourage parents to consider the dynamics that might put their daughter at a financial disadvantage after college. Here are just three of the many things they should discuss:
Choosing a major wisely. Understand the career options and salaries typically stemming from different majors. The AAUW study’s authors report that women would be smart to strongly consider entering the fields of science, technology, engineering or mathematics.
Choosing a college smartly. Does the name — and accompanying cost — of a private college or university really offer much more value than a public institution offering comparable education for less cost?
Choosing a loan carefully. Private loans or federal loans? Which ones might work best for shortest-term repayment and a long-term financial strategy?