Medical Debt vs. Student Debt: How Do They Compare?

With President Biden indulgent between $10,000 and $20,000 in student rentals for borrowers earning less than $125,000, some are beginning to wonder if other types of debt will also be forgiven.

Often, those who do not agree with the idea of ​​canceling student debt argue that such a measure would create a slippery slope and that the the public could demand the cancellation of other debts such as medical loans, car loans, etc..

Medical debt – a uniquely “American” concept

There is no comprehensive census of all medical debt holders in the United States and the numbers tend to vary widely. The Kaiser Family Foundation (KFF) reported in March that approximately twenty-three million people have medical debt over $250but later in June reported the number to be much higher – standing at about a hundred million people. Researchers found through a survey that “50 million adults ― about 1 in 5 people ― pays bills for their own care or that of a family member through an installment plan with a hospital or other provider.

Since these creditors “do not appear on credit reports unless a patient stops paying,” which makes it very difficult to identify a total amount due. In addition to these numbers, one in ten people in the United States “owe money to a friend or family member who has covered their medical or dental bills, another form of borrowing that is not usually measured”. These informal agreements are much more difficult to follow.

All together the KKF estimates that about half of the American population is currently paying with their own medical debt or that of a child, parent or other family member.

What is the amount of medical debt owing?

Due to the lack of complete information on formal and informal medical debt agreements, it is almost impossible to know the total amount owed. The amounts tend to vary widely from state to state, reflecting the complex healthcare landscapes across the country.

For example, in Wyomingseventeen percent of the population has medical debt, wthe median monthly payment being $1,611. Other states with higher median payments include Alaska ($1,363), Florida ($1,006) and Utah ($1,011). In Texas, more than a fifth of residents have medical debt with a median payment of $990. Rates in South Carolina are even higher with almost a quarter of residents – 24.4% — having debts related to health care needs.

The KFF estimates that the debt amounts to approximately $195 billiona fraction of what is held in student loan repayments that total $1.7 trillion.

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