There’s few places in the United States where more students are falling delinquent on their student loans than in Michigan.
A new analysis from the personal finance site WalletHub examined proprietary user data from the first two quarters of 2024 to determine “States Where Student Loan Delinquency Is Increasing the Most.”
“Being delinquent on student loans has the potential to ruin your finances and your credit score, but if you’ve only recently become delinquent you do have time to get back on track,” said WalletHub analyst John Kiernan.
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Researchers found the share of delinquent student loans in Michigan during the second quarter was 0.88%, which marked a 17.06% increase from the quarter before.
The change in share of delinquent student loans was the third highest among states in the nation, behind Louisiana with a 17.31% increase and Maine at 32.15%.
“Michigan ranks 14th among the state with the most student debt, so residents do borrow a lot for school in general and may have taken out more than they can handle,” the analysis read. “Another reason for the high delinquency rate is that Michigan is the state with the most people in financial distress. Michigan residents also have the 19th-highest delinquency rate for all types of debt combined.”
Michigan’s increase in delinquent student loans dwarfs other states in the region, with Illinois delinquencies up 6.5%, Wisconsin’s up 3.66%, Indiana’s up 2.8%, and Ohio’s up 0.86%. Michigan was also one of only two states in the Midwest with a double-digit increase, ahead of a 15.17% jump in North Dakota.
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The results are not surprising, considering the rapidly rising cost of living in the Great Lakes State in recent years.
Other research has shown Michigan has the highest auto insurance rates in the country, raging health care inflation, among the highest rates for electrical service, and an inflation adjusted median household income that has tanked 3% since Gov. Gretchen Whitmer took office.
“There’s a real concern that voters have with their financial situation,” University of Michigan economist Don Grimes recently told Bridge Michigan. “I think (the worries are) even more profound than the data shows.”
In July, a different WalletHub analysis of “States with the Most People in Financial Distress” dubbed residents of the Great Lakes State “the most financially distressed people in the country” based on accounts in financial distress.
Those results followed a United for ALICE report that shows nearly 200,000 more Michiganders are struggling to afford basic necessities than when Whitmer became governor in 2019.
In 2019, 38% of Michiganders were struggling to survive, a figure that increased to 41% by 2022, according to the report.
In 11 Michigan counties, more than half of residents can’t afford a survival budget that covers necessities like food, housing, transportation, and child care, while in some communities it’s as high as 79%.
While the state’s economic situation appears to be taking a toll college graduates, it’s been especially hard on older residents.
An analysis from the University of Michigan’s National Poll on Healthy Aging found “58% of older Michiganders say they’ve cut back on spending, 51% say they’ve been impacted by inflation a great deal, 57% say they have felt some or a lot of stress about personal finances, and 15% say they’ve avoided or delayed spending on health care and health-related costs.”