“Consumers are out of money” — America is entering a delinquency crisis

An alarming share of Americans are falling behind on their debts, with student loan delinquencies leading the surge.

Data from Equifax and the New York Fed’s Consumer Credit Panel show that serious delinquencies (loans that are 90 or more days past due) have exploded since 2022.

As of the first quarter of 2025, 14.3% of student loans have entered serious delinquency, the highest level on record.

Credit card delinquencies have climbed to 7.1%, roughly double their level in early 2021, while auto loan and mortgage delinquencies have also edged higher.

“Consumers are out of money,” wrote FreightWaves founder Craig Fuller, commenting on the delinquency spike.

Fuller, who has chronicled the ongoing “freight recession,” noted that weakening consumer demand for manufactured goods is increasingly weighing on the broader economy.

Weaker consumer spending and rising loan delinquencies are closely linked, underscoring a deteriorating financial reality for millions of U.S. households.

The strain is particularly acute for those entering the workforce amid sluggish job growth and elevated living costs. The data align with broader trends, showing that many Americans are struggling to stay financially afloat.

The American debt drag

The growing strain on U.S. households is becoming increasingly clear.

An August survey by Yahoo Finance and the Marist Poll found that one in three Americans reported that their financial situation has worsened over the past year, with high-interest debt contributing to the strain.

At the same time, data from the National Foundation for Credit Counseling (NFCC) suggest that debt troubles are deepening, with more people falling behind on payments across income brackets.

While lower-income households are feeling the sharpest pain, “it really doesn’t matter on the income level,” said NFCC CEO Mike Croxson. “It’s really about the debt level.”

Croxson noted that rising interest rates are pushing many borrowers past a “tipping point,” where interest expenses outstrip what they can afford to pay each month.

Data from VantageScore indicate that late-stage credit delinquencies have increased across all credit tiers, including among borrowers with the highest credit scores.

According to the New York Federal Reserve, total U.S. household debt hit a record $18.59 trillion in the third quarter of 2025, driven largely by mortgages.

However, the more concerning trends lie in revolving and non-mortgage debt: credit card balances reached a record $1.23 trillion, auto loan balances held steady at $1.66 trillion, and student debt increased to $1.65 trillion.