Americans are facing heightened financial pressure as rising costs for housing and health care outpace wage growth, with debt payments adding significant strain to household budgets. New data analyzing millions of consumer credit records reveals a record-high average monthly auto loan payment of $716 and an average student loan payment of $316 among U.S. adults. More than 74 million adults have outstanding auto loans, while over 36 million carry student loan debt. For the approximately 6 percent of individuals managing both types of debt simultaneously, monthly obligations frequently exceed $1,000.

These debt payments complicate traditional budgeting guidelines, which often focus on housing costs as a percentage of income but do not explicitly factor in debt service. Mariel Beasley, head of research at financial platform SaverLife, emphasized that households with identical incomes face markedly different financial realities depending on their debt load. For those without student loans, covering standard living expenses and saving may be manageable, whereas those with substantial monthly loan payments encounter significantly greater challenges.

Debt burdens vary across age groups and regions. About 45 percent of adults under 55 carry either a car or student loan, compared to 36 percent in the 55-to-64 age bracket and 18 percent among those over 65. Regional differences are also notable; combined monthly car and student loan payments typically range from $900 to $1,100 nationwide for people with both debts. However, total debt amounts fluctuate, with averages under $60,000 in South Dakota and exceeding $80,000 in Maryland and Washington, D.C.

The rise in debt payments results partly from factors such as increased vehicle prices and higher interest rates. While the share of people with auto loans has declined slightly from 31 percent in 2019 to 28 percent in 2026, payments have grown significantly. Meanwhile, student loan obligations have resumed following a multi-year pandemic-related pause.

Individual experiences highlight the financial challenges posed by debt. Waverly Reynolds, 48, who resumed college education later in life, paused student loan repayments during the pandemic and took out a car loan in 2020. With the anticipated Biden administration Save plan revoked by the previous administration, her monthly student loan bill is expected to rise to $700. Reynolds works two jobs in Texas to cover rent and expenses, emphasizing the importance of having recently paid off her car loan to manage her budget.

A recent report from the Century Foundation found that required monthly debt payments—excluding medical and “buy now, pay later” debts—have increased nearly 15 percent since late 2022, outpacing both wage growth and inflation. For those with consumer debt, payments now consume 10 percent of after-tax income on average, rising to 13.3 percent for Black workers and 10.7 percent for Hispanic workers, compared with 9.4 percent for White workers. Angela Hanks, a contributor to the report, noted that debt reflects and amplifies existing wealth inequalities, as those with greater wealth tend to avoid borrowing, while others increasingly take on loans that exacerbate financial disparities over time.