Yesterday in the New York Times, Tamar Lewin reported on declining financing for college as costs rise. Turns out this is a gender story. Here’s how: Women earn 58 percent of all undergraduate degrees. They enter college at higher rates than men, and they are less likely to drop out once they enter. According to conventional wisdom, this is because men are less studious and committed to school than women. Some recent books even claim that men are slackers who cannot adapt to a changing economy.

However, a new study, “Gender, Debt, and Dropping Out of College,” released in February in the journal Gender & Society, suggests quite a different reason for men’s dropout rates: men are less willing to tolerate the high levels of debt that are increasingly needed to complete a college education—on average, men tolerate $2,000 less educational debt than women do.

According to study authors Rachel Dwyer and Randy Hodson of Ohio State University and Laura McCloud of Pacific Lutheran University, this isn’t because men are slackers, but because in the short term men without college degrees can earn the same salary as college graduates, which makes it tempting to forgo debt and get to work. The same is not true for women.

Men who drop out face no financial penalty in their entry-level salaries. Women, on the other hand, are financially penalized for dropping out right away, earning an average of $6,500 less in their starting salaries than women college grads. Ironically, this initial gender advantage for men imposes considerable long-term costs in their lifetime earnings: by midlife, college-graduate men’s salaries are on average $20,000 higher than those who did not complete college.

This trend in men’s and women’s response to debt comes at a time when graduating from college has become increasingly difficult for low and moderate income Americans over the past 25 years. This is largely because the average cost of an undergraduate degree has climbed at a faster rate than stalling family incomes in the U.S. The cost of college (public and private/non profit) in 1992–net of grant aid–was $9,600; in 2010 it was a little more than $13,000 (inflation adjusted/2012 dollars).

Scholars from Sociologists for Women and Society and the Council on Contemporary Families, put this trend in larger context, noting that:

• Graduation rates have remained flat in the U.S. since the 1980s, and only about half of students who start a four-year degree complete by the 6-year mark. Australia, the United Kingdom, and Norway, Japan, and 11 other OECD countries exceed our graduation rate today. Fifteen years ago, only Australia matched graduation rates in the U.S.
• One reason for this stall is that students must work more hours than in the past to pay for schooling. In 1970 only one in ten full time college students worked 20-34 hours per week. Today that proportion has doubled to one in five.
• In addition to working more, students whose parents cannot fund their college education typically go into debt. According to the College Board, in 1975, 80% of student aid took the form of direct grants, and only 20% in loans; now that is nearly reversed: 70% of student aid is in the form of loans, and only 30% takes the form of grants.

Gender,Debt and Dropping Out of College. Going into debt to finance college does not have uniformly negative results. Dwyer and colleagues found that having some college debt makes staying in college more likely for both men and women. But when men reach a debt level of slightly less than $12,500, they are more likely to be discouraged, while women’s debt level can reach about $14,500 before they become more prone to be discouraged.

The job market. Why are men more likely to give up on college and get a job instead when their college debt mounts, while women stick to their original plans? In “Gender, Debt, and Dropping Out of College,” Dwyer and colleagues suggest that women’s willingness to stick it out longer in the face of higher debt is a paradoxical result of women’s continuing disadvantage on the job market. In the short run, men who drop out of college do not experience a wage penalty in comparison to their peers who go on to graduate. It may be harder for men than for women to see the advantage of staying in college because in the early years after college, men who complete college make no higher pay than men who drop out.

In contrast, women who complete college earn on average upwards of $6,500 more than women who have dropped out. The authors explain, “Female dropouts simply face worse job prospects than male dropouts.” In particular, women who drop out are more likely to be employed in lower-paying service work, while men who drop out have opportunities in higher–paying manufacturing, construction, and transportation work.

So men withdraw sooner, but pay later. While men don’t face a wage penalty early on if they drop out, the penalty accumulates later. By middle age, men with a college degree earn $20,000 more on average than men with some college but no degree.

As University of Massachusetts sociologist Joya Misra, editor of Gender & Society, puts it, “Dwyer and her colleagues show that looking at gender differences can’t be reduced to ‘winners’ and ‘losers.’ Women’s recent advantage in college graduation rates is associated with their relative disadvantage in the job market. At the same time, men’s seeming advantages in the short run can lure them away from a surer path—college completion—to longer term economic security.”

The study is based on analysis of the National Longitudinal Survey of Youth 1997 Cohort (funded by the Bureau of Labor Statistics). The researchers used a nationally representative sub-sample of nearly 9,000 young adults that was interviewed yearly from 1996 until 2011. At the most recent interview, the average age was 28 years old.