U.S. household debt has reached a record high of $18.59 trillion in the third quarter of 2025, according to the Federal Reserve Bank of New York. The sharp increase was fueled by rising balances in mortgages, credit cards, and student loans, signaling growing financial strain on American families. At the same time, delinquency rates are climbing, especially among student loan borrowers.
The report shows total household debt rose by $197 billion from the previous quarter. Mortgage balances, which remain the largest component of household debt, increased by $137 billion to $13.07 trillion. Credit card debt also jumped by $24 billion, pushing the total to $1.23 trillion, while student loan balances rose by $15 billion to $1.65 trillion.
Student loan defaults showed the most significant spike, with 9.4% of borrowers now in serious delinquency, meaning payments are 90 days or more past due. This is the first major increase in defaults since the Biden administration allowed the COVID-era payment pause to expire. The overall serious delinquency rate across all types of debt now stands at 3.03%.
The New York Fed noted that the economic impact of inflation and interest rate hikes has been uneven. Higher-income households have maintained spending, while lower-income families are increasingly relying on credit and falling behind on payments. The data reflects a growing divide in financial stability across the country.
These developments raise urgent concerns for fiscal policymakers and financial institutions. The rise in delinquencies, particularly in non-housing debt like credit cards and student loans, may signal deeper systemic issues.
As Washington debates student loan forgiveness and credit regulation, the reality on the ground shows a nation leaning on borrowed money. The record debt levels and rising defaults highlight the consequences of easy credit and federal mismanagement.
