Roughly 24% of Americans with a credit record are behind on payments for medical bills, student loans, auto loans or retail credit, according to a new analysis from the Urban Institute, a nonpartisan think tank. In communities of color, that figure rises to 30%. The median debt owed by those in collections stands at $2,913, while the figure reaches $3,009 in communities of color. The share of Americans with debt in collection this year has risen by about one percentage point from less than 23% in 2025, based on the Urban Institute's analysis of more than 10 million credit records and U.S. Census data.
The surge in delinquencies reflects broader financial strain. Consumers' credit card balances have reached a record $1.29 trillion, up nearly 70% over five years, according to figures from the Federal Reserve Bank of New York. Consumer prices have risen by an average of 30% since 2019, forcing Americans to deplete savings and finance daily expenses through debt. Breno Braga, senior fellow in the family and financial well-being division at the Urban Institute, told CBS News that "the increasing cost of living makes it harder for people to make payments on basic needs." Rising interest rates imposed by the Federal Reserve as it attempts to control inflation have compounded the problem by making it harder for people to catch up on existing obligations.
Student loan and medical debt represent significant portions of the delinquency problem. Roughly 16% of student loan borrowers are behind on payments, though this varies by geography. In Louisiana, which has the highest share of people with debt in collections, the student loan delinquency rate reaches roughly 22%. Braga attributed geographic disparities to factors including lower incomes and higher poverty rates in some regions. "People there tend to have lower credit scores, so when they get a credit card or take out an auto loan, they tend to pay higher interest rates," he explained. Medical debt affects 3% of Americans, with a median balance of $1,492, despite many having health insurance. "People without health insurance are more likely to have medical debt, but having coverage does not protect you at all from having medical debt, especially not now with the high deductible plans we are seeing," Braga said.
Fifteen states have passed legislation preventing health care providers from reporting medical debt to credit rating agencies, potentially limiting damage to credit scores. However, Braga cautioned that this does not eliminate the underlying debt. Ted Rossman, principal consumer finance analyst at Money Management International, a nonprofit debt counselor, described many household budgets as reaching a "breaking point" as years of high prices have forced Americans to finance increasingly larger portions of their daily expenses through borrowed money.