About 24% of Americans who have a credit record are behind on payments for medical bills, student debt, auto loans or retail loans, according to a new Urban Institute analysis. The median amount owed is $2,913. In communities of color, the share reaches 30%, with a median balance in collections of $3,009.
The nonpartisan think tank examined more than 10 million credit records alongside U.S. Census data. Its findings show that the proportion of Americans with debt in collections has climbed by about one percentage point in 2026, compared with less than 23% in 2025. Breno Braga, a senior fellow in the institute's family and financial well-being division, told CBS News that rising living costs are making basic expenses harder to cover.
Higher interest rates this year, as the Federal Reserve works to contain inflation, are also making it more difficult for borrowers to catch up. Separately, new Federal Reserve Bank of New York figures put consumer credit card balances at a record $1.29 trillion, an increase of nearly 70% over five years.
Ted Rossman, principal consumer finance analyst at the nonprofit debt counselor Money Management International, said years of elevated prices have pushed Americans to use up savings and borrow to pay everyday expenses. In an email to CBS News, he described many household budgets as reaching a “breaking point.” Consumer prices have increased by an average of 30% since 2019, he noted.
Among student loan borrowers, almost 16%, or roughly one in six, are behind on payments. The rate differs across the country. Louisiana, which has the highest proportion of people with debt in collections, has a student loan delinquency rate of about 22%. Braga linked those differences partly to lower incomes and higher poverty rates in some areas. Lower credit scores can also leave borrowers paying higher interest rates on credit cards and auto loans, adding to repayment difficulties.
Medical expenses remain another source of financial strain, including for people who have health insurance. The Urban Institute found that 3% of Americans have medical debt in collections, with a median balance of $1,492. That measure covers unpaid hospital and other medical bills but leaves out health care expenses charged to credit cards.
Braga said uninsured people face a greater likelihood of medical debt, while coverage can still leave patients with substantial bills. He pointed to high-deductible plans as a particular concern, alongside the broader burden of expensive care and insufficient insurance coverage.
Fifteen states have enacted laws preventing health care providers from reporting medical debt to credit rating agencies. Those restrictions can reduce harm to consumers' credit records. Braga cautioned, however, that keeping a bill off a credit report does not eliminate the underlying debt.
