A new 2021 report from the Urban Institute looks at debt on a national and state level, including differences between communities of color and majority white communities. The report is based on data from the Census Bureau and a credit bureau. In all categories, people from communities of color had a higher percentage of debt in collections.
The report provides a look at how Iowans compare nationally on the amount and types of debt in collection. For example, nationally, nearly 28% of Americans have debt in collection but almost 39% of people from communities of color have debt in collection. About 22% of Iowans have debt in collection but about 48% of Iowans from communities of color have debt in collection. The median amount of debt in collection for Iowans is $1632 compared to $1835 nationally.
Nearly 11% of Iowans have medical debt in collection, compared to nearly 15% of all Americans. The percentage of Iowans from communities of color with medical debt in collection is 14%. The median amount of medical debt in collection for all Americans is nearly $800.
About 10% of all Iowans with student loan debt has at least a portion of those student loans in collection following a default on the loans. The percentage of Iowans from communities of color who have student loans and some of that debt in collection is over 18%.
About 2% of Iowans have delinquent auto loans and delinquent credit card debt, with the median amount of credit card debt in collection at nearly $500. Nationally, 3% of all Americans are delinquent on auto loans and 10% of all Americans who have student loan debt have some of those student loans in collection. Almost 16% of Americans have student loans, with the median amount of that debt at almost $20,000. Almost $12,000 is the median amount of student loan debt in collection.
The report provides clear support for the belief that Congress needs to do more to make it easier to eliminate debt, especially student loan debt, through bankruptcy. The report also shows the impact that systemic racism has had on people of color. More needs to be done to address inequities built into our economy.
