U.S. Household Debt Reaches Record High of Over $18 Trillion, with Rising Student Loan Delinquencies as a Major Worry

The latest quarterly report from the Federal Reserve Bank of New York reveals that U.S. household debt surged by $167 billion in Q1 2025, hitting a record high of $18.20 trillion. The data, sourced from the New York Fed’s Consumer Credit Panel, underscores key trends in consumer finance such as rising mortgage balances and a notable increase in student loan delinquencies.

Mortgage balances saw a substantial increase of $199 billion, bringing them to $12.80 trillion by March 2025’s end. On the other hand, credit card balances dropped by $29 billion to $1.18 trillion and auto loan balances fell by $13 billion—marking their second straight quarterly decline since 2011—to settle at $1.64 trillion. The report also indicates that home equity lines of credit (HELOC) continued their upward trend for the twelfth consecutive quarter, with balances rising by $6 billion to reach $402 billion.

New mortgage originations experienced a slight uptick during Q1, totaling $426 billion. Credit card limits also saw moderate growth with a $77 billion expansion—a 1.5% increase from last quarter.

However, significant changes were noted in student loan debt dynamics. Following a pandemic-induced reporting pause, delinquent student loans are now reappearing on credit reports. Consequently, there has been a sharp rise in student loans transitioning from current to delinquent status; Q1 2025 saw 7.74% of student debt reported as over 90 days delinquent compared to under 1% in Q4 2024.

Daniel Mangrum, research economist at the New York Fed, pointed out that although credit card and auto loan serious delinquency rates have stabilized over the past year, resuming reporting on student loan delinquencies this quarter has led to a marked increase in seriously delinquent borrowers.

Overall delinquency rates for all debt types edged up slightly from last quarter with 4.3% of outstanding debt now classified as delinquent at some stage. While most debt types maintained stable early-stage delinquency transition rates, student loans were an exception.