Study Finds Gender Bias My Be Impacting Decisions in Student Loan Bankruptcy Cases

A new study led by a group of researchers at Florida International University in Miami finds that gender bias may be creeping into student loan bankruptcy court cases.

Researchers examined nearly 900 student loan discharge decisions handled in U.S. bankruptcy courts between 1985 to 2020. In addition to gender, researchers also factored in other variables, including marital status, the number of children, medical issues, or documented disability claims, as well as if an attorney was present.

In the United States, women hold about two-thirds of student loan debt. As women outnumber men in pursuing college degrees, and the cost of higher education becomes more expensive, it’s expected women will continue to be the primary holders of student loan debt. Compounding this problem may be the gender pay gap. When women enter the workforce, they tend to earn less — meaning less money is available to put toward repayments.

The bankruptcy process for student loans differs from typical bankruptcy proceedings and certain criteria have to be met, including an “undue hardship” test. It’s not simply about presenting bills and proving income. Instead, it can be a laborious process of putting together the full picture of a person’s private life.

The researchers found gender played a somewhat complex, but important role in the outcome of the cases. Single mothers were more likely to have their loans discharged than single fathers. However, when a debtor disclosed a medical issue that could interfere with their ability to earn a living, males had a substantial advantage over females. In fact, men were 93 percent more likely to have their loans discharged when disclosing a medical condition, as compared to women who disclosed medical conditions.

“With this study, what we’re actually seeing is how special circumstances can be tied closely to gender and traditional gender roles,” said Kelsey L. Hess, a graduate student in psychology at Florida International University and lead author of the study. “Certain factors were not weighted equally between male and female debtors.”

The researchers emphasize one important focus of the study — in terms of biases that deserve special attention— women’s medical conditions are discounted in court. Especially because it mirrors other research that shows female patients’ pain is taken less seriously than the same pain levels in male patients, leading to differences in treatment.

The full study, “The Influence of Gender and Other Extralegal Factors on Student Loan Bankruptcy Decisions,” was published on the website of the journal Psychology, Public Polcy, and Law. It may be accessed here.