And per person, the study found Texas had the third-highest number of accounts in forbearance or with deferred payments.
DALLAS — Texas, how are you feeling? According to WalletHub, we shouldn’t be surprised if the answer is “distressed”. The site recently listed Texas as the state with the most people in financial distress.
For this analysis, being ‘Number One’ is a bad thing. And Texas was number one overall. And compared to the other states, we weren’t too far away from being number one (again, that’s bad in this case) for each of the categories they considered: Credit scores (Texas was #13), the number of people with distressed (or delinquent) accounts (#8), the average number of those distressed accounts (#7), where we rank in bankruptcy filing increases (#6), and how often Texans search Google for terms like “debt” (#13) and “loans” (#5).
Something appears to be afoot. Late last year, LendingTree looked at the metros with the most non-mortgage debt. Austin came in at number one, followed by San Antonio at number two, Houston at number three and Dallas at number six. With this analysis as well, number one is not a good thing. Being in second, third or sixth place on the list of metros with the biggest debt burdens obviously isn’t good either.
The concern grows when you are in the red, and you can’t even chip away at it. Back to the WalletHub report…they found that per person, Texas had the third-highest number of accounts in forbearance or with deferred payments.
New student loan distress?
That figure takes on new urgency when you consider that one big source of debt — student loans — could become more of a struggle for some borrowers. According to The Federal Reserve Bank of New York, in the fourth quarter of 2024, there were 3,906,820 student loan borrowers in Texas. And of those, 1.2% were delinquent.
That comes out to about 46,882 Texas student loan borrowers in delinquency, the largest number of any state. And that can be the beginning of a troubling domino effect. The Mortgage Monitor says that, “Borrowers delinquent on student loans are four times more likely to be delinquent on their mortgage”.
And now, the Trump administration has announced it is restarting interest accrual on student loan forbearances that had been interest-free under a relief program called the SAVDE plan put in place during the Biden presidency.
But, the Department of Education says it is still “quick and easy” to apply for an income-driven repayment plan. Additionally, Forbes notes that provisions in Trump’s recently passed spending bill includes an “interest and principal subsidy” which may be beneficial to some borrowers. You can read more about that here.