Americans are struggling to keep up with credit card bills, student loans, and other financial obligations as household debt climbs and economic pressures continue to strain consumers’ finances, Business Insider reports.
A new Urban Institute analysis found that 23.5% of Americans with credit histories have debt in collections, with a median outstanding balance of $2,913. The findings highlight growing affordability concerns as consumers navigate elevated borrowing costs and everyday expenses.
The financial burden is particularly pronounced in communities of color. According to the Urban Institute, ZIP codes where at least half of residents are people of color were approximately 50% more likely to have debt in collections than predominantly white communities.
The disparity underscores persistent financial challenges that can make it harder for Black Americans and other communities of color to build wealth and maintain access to affordable credit.
Geographic differences were also significant. In Jim Hogg County, Texas, more than half of the residents with credit histories had outstanding debt in collections.
Student loan borrowers are facing similar challenges. The Urban Institute found that 16% of federal and private student loan borrowers were behind on payments in 2026, with a median defaulted balance of $5,078.
Federal student loans generally enter default after 270 days of missed payments, while private loans typically default after 180 days. The U.S. Department of Education has paused involuntary federal student loan collections, including wage garnishment, while implementing changes to repayment policies.
Meanwhile, new data from the Federal Reserve Bank of New York shows total U.S. household debt reached $19.1 trillion in the third quarter of 2026, up $334 billion from the previous quarter.
Credit card balances climbed to $1.29 trillion, while student loan debt reached $1.66 trillion.
The report also found that 5% of outstanding household debt was in some stage of delinquency. The share of student loan balances at least 90 days overdue increased to 10.9%, up from 10.6% in the second quarter.
The findings highlight continued financial pressure on American households, particularly in communities already facing disparities in credit access and wealth accumulation.
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