Back in the 1990s when the NBA’s players and owners were fighting over money, Patrick Ewing, who now coaches at Georgetown was quoted saying, “we make a lot, but we spend a lot.” Now, a new study shows that in the D.C. region, many can say “we spend a lot, but we make a lot.”
Lending Tree looked at how much debt each state has per capita, meaning the total amount of debt accumulated from mortgages, auto loans, student loans, credit cards and personal loans, and then divided it by each adult. Maryland, DC, and Virginia might vote blue on Election Day, but the area’s finances are in the red.
“The per capita debt for Maryland is $43,330,” said Lending Tree Senior Research Analyst Kali McFadden. “D.C. is just behind at $42,870, and Virginia is pretty close at $40,070.”
Compared to other states, adults in Maryland have the third highest per capita debt, behind Colorado and California. D.C. comes in fourth place, and Virginia is 10th.
“The big driver of course is mortgage balances,” said McFadden. “D.C. is an expensive place to live, but on the other hand incomes are extremely high in D.C. relative to the rest of the country. So it doesn’t necessarily mean people can’t afford these debts.”
We also happen to live in one of the most educated regions in the country, and that’s reflected by the amount of student loan debt that exists. It’s especially high in D.C., where the average adult owes more than $50,000 on student loans. That’s at least $17,000 more than the next closest state.
“If you can get a great education that sets up with a great career then you know that’s good debt,” noted McFadden. “If it’s the chances of having a house, most of us don’t have a few hundred thousand dollars that we can just buy a house in cash.”
Each adult in the D.C. area also tends to have about $1,000 more on their credit cards to pay off, though in some cases that could be business expenses that show up in your name but get taken care of in monthly expense reports.
The ideal way to go through life is with no debt at all, but “the question is really whether people are paying off these debts at the end of the month,” said McFadden. “That’s, I think, the more salient thing.”
