Deeper in Debt: Here’s How Much U.S. Households Owe on Average

by Samantha Whidden
deeper-in-debt-heres-how-much-us-households-owe-on-average

Big trouble, America. The latest reports reveal that households in the United States with debt now owe more than $150,000 on average. This debt includes various types of purchases from credits to car loans. 

According to CNBC, the average U.S. household with debt now owes $155,622. Or more than $15 trillion altogether. This is an increase of 6.2% from a year ago. The median income fell 3% over the past two years. Meanwhile, the cost of living increased by nearly 7% due to the rising housing and medical costs throughout the country.

In the latest poll by NerdWallet, which had 2,000 adult participation, more than three-quarters of Americans, or 78%, have received a form of COVID-19 pandemic relief since March 2020. However, the relief has been mainly used for purchasing necessities, savings, or paying down debt.

Despite receiving relief, one-third of the poll participants revealed that their household debt has actually become worse over the past year. However, Americans have paid off a record $83 billion in credit card debt. But credit card balances are on the rise again. As well as mortgage, auto, and student loans. 

Speaking about the latest poll, Sarah Rathner, NerdWallet’s Credit Card Expert, stated, “The past year and a half was already tough for the millions of Americans who lost jobs. Now, we’re faced with rising costs for much-needed items. Food, housing, gas, transpiration, and medical care. It remains difficult for many [Americans] to catch up.”

Navient Agrees to $1.85 Billion Student Loan Debt Settlement 

Earlier this week, student loan servicer Navient announced it has reached a $1.85 billion settlement with more than three dozen states in an effort to resolve allegations of predatory lending and deceptive practices for more than a decade. The resolution includes $1.7 billion in private student loan debt cancellation.

According to NBC News, Pennsylvania Attorney General, Josh Shapiro, accused Navient of steering borrowers further into debt through forbearance practices. This allowed the borrowers to temporarily postpone repayment but still be charged interest. Shapiro also stated the student loan servicer engaged in using risky subprime private loans for students that attended for-profit colleges while knowing the borrowers would not be able to repay their debt. 

In a statement, Shapiro declared, “Navient repeatedly and deliberately put profits ahead of its borrowers. It engaged in deceptive and abusive practices; targeted students who it knew would struggle to pay loans back; and placed an unfair burden on people trying to improve their lives through education.”

Mark Heleen, Chief Legal Officer of Navient, also issued a statement. “The company’s decision to resolve these matters, which were based on unfounded claims, allows us to avoid the additional burden, expense, time, and distraction to prevail in court.”

Outsider.com