23.5% of Americans With Credit Histories Have Debt in Collections

Nearly a quarter of Americans with a credit history — 23.5% — have debt in collections, with a median amount of $2,913, according to a new Urban Institute analysis drawing on US Census Bureau and credit bureau data.

The report lands as affordability weighs on voters and household budgets stretch thinner. Americans owed $18.8 trillion in total debt as of the second quarter of 2026, the New York Federal Reserve reported, and 4.7% of that debt had slipped into some form of delinquency by the end of June. Student loans look worse: 10.6% of student loan debt was 90 days or more delinquent.

One number captures the strain: 16% of federal and private student-loan borrowers were behind on payments in 2026, carrying a median defaulted amount of $5,078.

Where is the debt concentrated?

The collections crisis isn't evenly spread. In rural Jim Hogg County in south Texas, more than half of residents with a credit history have debt in collections. Communities of color face a structural gap too: the Urban Institute found that zip codes where at least half the population is non-white were roughly 50% more likely to have debt heading to collections than white communities.

The timelines for falling into collections vary sharply by debt type. A borrower who misses credit card payments typically goes to collections four to six months later; medical debt moves faster, at around three to six months. The median credit card delinquent debt sits at $680, compared with $1,492 for those behind on medical bills.

What happens to student loans in default?

Student loans follow a different track depending on who issued them. A federal student loan typically defaults after 270 days of nonpayment, after which the borrower gets a window to work with their servicer, rehabilitate the loan, and return to good standing. Private student loans default faster — after 180 days — and fall under standard collection procedures.

There's a temporary shield for federal borrowers. The Education Department has paused involuntary collections on federal student loans, including wage garnishment and the seizure of federal benefits, while it implements its repayment overhaul. The department hasn't said when the pause will lift — a deadline that matters for millions of borrowers now months behind.

Why are borrowers falling behind?

Inflation and rising grocery prices have forced households to triage which bills get paid first, and high interest rates on credit cards and student loans make catching up harder once a payment slips.

Susan Cannon, 73, is a case in point. She previously told Business Insider she carries nearly $40,000 in debt spread across 19 credit cards, with interest rates ranging from 12% to nearly 35%.

"I've always tried to put some in savings, but it's gotten to where it's all going toward interest," Cannon said. "I just cannot get ahead."

Her math is the national math in miniature: when interest eats the payment, balances never shrink. With 4.7% of all household debt already delinquent and the federal collections pause still undated, the share of Americans in collections has room to grow before it improves.

The takeaway in plain words: one in four credit-active Americans is already in collections, and the policy clock on student loan enforcement is still ticking without a stated end date.