MBA Debt Hurts Women More Than Men, Bloomberg Finds

Earlier this week, Bloomberg took a look at the gender pay gap among MBA graduates and found that it will take women an average of one year longer than men to pay back their student loans.

According to an analysis of data from its annual ranking of MBA programs, the men and women surveyed borrowed a median of $75,000 to finance their MBA degree. At graduation, MBA debt made up 56% of the take-home pay for men and 62% of women’s compensation.

However, in the video above, Bloomberg‘s Francesca Levy notes that six to eight years out, women are earning an average of $140,000 while men earn $175,000 annually. Employers, either consciously or unconsciously, are paying women 80% of what men with the same degree take home.

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“As the gender pay gap widens, the loans begin to weigh more heavily on women than on men. The typical woman would repay the debt seven years after getting her MBA, a year after the typical man who went to business school,” Bloomberg researchers found.

Four years after graduating, student debt takes up 25% of women’s earnings but only 14% of men’s.

One of the things driving the disparity is bonuses—that extra income that many people depend on as a huge chunk of their salary, says Levy. “Bosses are making decisions about individual people and it’s trending in this one direction where probably equally qualified men and women are getting really different outcomes, and the difference just grows and grows year after year.”

Ultimately, women who pursue an MBA at one of the world’s elite business schools are making a safe bet that their eventual return on investment far outweighs the heavy debt they will initially incur.

“Most of them end up earning six figures and get rid of their loans relatively quickly,” Bloomberg researchers have found. “They just arrive at that promised goal later than men.”


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