Wednesday, July 31, 2019

Florida residents are the fourth-worst in the U.S. for paying back loans

Posted By on Wed, Jul 31, 2019 at 6:06 PM

click to enlarge PHOTO BY SHARON MCCUTCHEON/UNSPLASH
  • Photo by Sharon McCutcheon/Unsplash
With a little to no affordable housing, a swath of low paying jobs, and skyrocketing healthcare costs, it really shouldn’t come as a surprise to anyone that Floridians are drowning in debt.

Financial planning company Fabric recently published a comprehensive ranking of the nation’s states with the most unpaid debt, and Florida barely missed the podium, ranking as the fourth worst state.

The study, which analyzed statistics from Federal Reserve Bank of New York, the U.S. Census Bureau, and the Bureau of Labor Statistics, took into account four different types of loans – auto, student, credit cards, and mortgages. The study showed that Florida has an auto-loan delinquency of 5.3%, credit card delinquency of 9.7%, mortgage delinquency of 1.6% and a whopping student loan delinquency of 13.7%, which is significantly higher than the national average of 11.4%, according to Forbes.

Overall, Florida earned a debt delinquency index of 83. For comparison sake, Mississippi ranked as the worst state for debt, with a delinquency index of 100.



According to Fabric, Florida’s high delinquency rate is directly correlated with the economic health of the state, as well as local lending and borrowing practices. With a poverty rate of 13.7%, higher than the national average 12.3%, Florida’s low earning population is ultimately more susceptible to loan delinquencies.

A 2018 article from the Tampa Bay Times explained the dangers of predatory loans targeted at low-income people, who at the end of the day, often rely on payday loans to survive.

"Floridians, mostly in poor neighborhoods, took out a staggering 7.7 million payday loans over 12 months in 2016 and 2017,” the article reads. “And nearly a third of all customers took out at least 12 loans that year, a clear sign of the "debt trap" that lenders profit from, critics say.”

Also it doesn’t help that the country’s current cumulative student loan debt is now at a whopping $1.4 trillion, which is an increase of 116% over the last 10 years.

And, Florida is particularly screwed in this category. Currently more than half of college students in Florida are graduating with an average loan debt of $24,461, according to a 2016 study from the Institute for College Access & Success.

Stay on top of Orlando news and views. Sign up for our weekly Headlines newsletter.

Tags: , , , ,

Newsletters

Never miss a beat

Sign Up Now

Subscribe now to get the latest news delivered right to your inbox.

Calendar

© 2019 Orlando Weekly

Website powered by Foundation