Gen Z debt is rising, credit counseling demand is at a 10-year high, and many people are discovering that debt consolidation loans don’t always stop the cycle. In this episode, Ted Rossman, Money Management International breaks down what’s driving the surge in debt management plan enrollments and counseling sessions—and what you can do to regain control of your finances before balances climb back up.
Jeffrey Snyder, Broadcast Retirement Network
Joining me now, Ted Rossman, who’s now with Money Management International. Ted, it’s always great to see you.
Thanks for joining us on the program this morning.
Ted Rossman, Money Management International
It’s great to be here. Thank you.
Jeffrey Snyder, Broadcast Retirement Network
So before we get into this latest study, latest research, I want to give you an opportunity. You’ve kind of shifted roles, always important to talk about and disclose kind of where everyone works. Tell us about your new role, what you’re going to be doing, and then we can get into the survey results.
Ted Rossman, Money Management International
Sure. I am principal consumer finance analyst at Money Management International. We’re one of the largest and oldest nonprofit credit counseling agencies in the U.S. So really what we specialize in doing is helping people get out of debt, specifically unsecured debt, like credit cards, personal loans, maybe some medical debt, payday loans, really helping people take those 20 or 30 percent interest rates and bring it down hopefully to 7 or 8 percent and pay it off a lot quicker.
Jeffrey Snyder, Broadcast Retirement Network
Well, all I can say is you’re one of our favorite guests. They’re lucky to have you. I’m sure they feel that that way as well.
You are a wealth of information. So we’re thankful that you come back in the program. We wish you well in your new role.
So let’s talk about debt management enrollment. There’s a survey that came out yesterday on some new findings. It’s up, Ted, and that’s concerning.
It’s probably good business, but it’s definitely concerning. Sorry, I wanted to couch my perspective.
Ted Rossman, Money Management International
That’s right. Yeah, we’ve seen a substantial increase. Right now what we’ve seen in the first half of 2026 is actually the most enrollments in debt management plans that we’ve seen in a decade.
The number of financial counseling sessions that we’re helping people with has been up for five straight years. A lot of this is really reflective of the macro backdrop. As we know, prices are high.
Interest rates are high. People are struggling, unfortunately. People are coming to us with more debt.
They’re coming to us at younger ages. There is a lot that we can do to help. Like I said, the typical tactic is to get someone into a debt management plan that brings their interest rate down to an average of about 7.7 percent. This plan lasts about four or five years. You don’t necessarily need great credit. We’re not going to be scared off if you have five figures of debt.
A lot of people are finding difficulty doing it on their own just because they feel like the low-hanging fruit is gone. They’ve cut what they can cut. There’s a lot of everyday expenses to go around.
We don’t want to feel shame about debt because typically you’re in debt for practical things. It’s medical bills. It’s car repairs.
It’s groceries. It’s things like that. We help people get to the other side of that.
Jeffrey Snyder, Broadcast Retirement Network
I agree with you. I think it’s a very difficult time. I read somewhere, I’m not sure exactly, it probably is my newsletter tomorrow morning, 33 percent increase in grocery expenses.
It’s the largest in 50 years. I feel that. I feel that in gas prices.
I think a lot of people are really feeling that and they’re looking for ways to pay their bills. Ted, when you look at the demographic information, are there specific groups of people that are coming for counseling sessions that have higher debt that are looking to, I’m going to call it refinance, consolidate their debt?
Ted Rossman, Money Management International
Millennials really stand out. More than half of our clients are millennials. The highest debt loads actually go to Gen Xers.
The average Gen Xer debt load among money management international clients is actually north of $50,000. It’s around $43,000 for millennials. It’s around $40,000 overall.
Really across the age spectrum, we see challenges with debt. Gen Zers have a lot less debt. The average among our clients is about $22,000 for Gen Z, but that number is growing rapidly.
In fact, the percentage of Gen Z clients is jumping more than any other. These are all things that are coming together here where we see different challenges at different ages, but it’s really millennials that stand out the most. They’re living those expensive sandwich years.
Jeffrey Snyder, Broadcast Retirement Network
You mentioned Gen X. That’s a generation that I’m a part of and that concerns me because we’re very close to retirement. If you look at age 65 is the year, I don’t think that’s the right year, but a lot of people are close to retirement and they’ve got sizable debt.
They’ve got not only unsecured debt like credit card debt, but according to Betsy Mayotte over at the Institute of Student Loan Advisors, there’s a lot of student loan debt. It’s all compounding.
Ted Rossman, Money Management International
Student loan debt is in its own category. That’s not usually something that we can wrap into one of these debt management plans, but it is very relevant to the holistic picture of how much debt you have. You’re right.
When people are coming out of school with tens of thousands, sometimes even hundreds of thousands of dollars in debt, it’s just having a spillover effect. We’re seeing delayed milestones. People are getting married later.
They’re having kids later. They’re having fewer kids. It’s impacting homeownership trends.
The median age of a first-time homeowner is 40. That’s moved back in recent years by a full decade. We really see a lot of this is interrelated.
That’s why we need to treat not just the symptoms, but really the underlying causes of debt as well. One big trend that we’re seeing is that people are coming to us with more personal loans and with higher balances. A lot of them are coming at this for the right reasons.
They’re trying to use a personal loan as a form of debt consolidation. Unfortunately, what’s happening to a lot of people is they pay off the credit cards with the personal loan, but then they still have the personal loan debt, and then they run the credit cards right back up. Again, not to shame people because a lot of this is very practical stuff, but as our CEO Jim Triggs is fond of saying, you can’t borrow your way out of debt.
We don’t want to treat this as a shell game where you’re moving money here and there and everywhere. We also really want to get to the root cause of what’s going on, that dirty word about budgeting. We really want to make sure that we’re just staying on top of these things and hopefully knocking out the debt and not going back there.
It is a huge tailwind if we can take your 25% or 30% credit card rate and bring it down to 7% or 8%. Don’t be afraid to ask for help.
Jeffrey Snyder, Broadcast Retirement Network
Ted, how much of this is related to, obviously, the cost of living has gone up. I would argue that personal income has been flat, and we’ve seen that that has not really grown at the same rate, but how much of this is related? I’m going to go back to financial literacy.
It’s something you and I have talked about a lot. Managing debt, understanding what unsecured debt is versus secured debt, that’s an important component to your financial knowledge. How much of this is interrelated with financial literacy?
Ted Rossman, Money Management International
I’m sure that some of it. I do wish that financial literacy was more widely taught in schools, but I tend to think it’s more practical items. People don’t want to be in debt, but it’s really a necessity for so many people.
I would point the blame largely at inflation and also at the higher interest rates that are meant to combat inflation but make it harder to pay off your debt. We just see so many practical things leading to debt, medical bills, car and home repairs, grocery bills. Look at some of the stats.
The personal saving rate is down to just 3%. That’s really largely because necessities have cut so much into people’s budgets. These past several years, even if you’ve gotten a raise and even if you’re working, your expenses are up so much.
You mentioned the average grocery bill is up 33%. We could talk about sharply higher housing costs, medical care, child care, all of these things, transportation. Look at the price of gas, the price of the car itself, the repairs.
All of these things, it just hasn’t been enough. The typical person’s wage increases have not kept pace with rising prices. That’s where a lot of this just comes back to that central conundrum of would you rather get a 5% raise if inflation is 8% versus if you got a 3% raise but inflation is 2%.
Inflation has been running hotter than the Fed’s target for a while now. There’s really been a cumulative effect that has stacked up. We think about so many things on a month over month or year over year basis.
If you go back to pre-pandemic pricing, a lot of things, food included and housing and medical care and others, they’re 30%, 40%, 50% higher than they were. That’s just hard to fit into the monthly budget.
Jeffrey Snyder, Broadcast Retirement Network
You add the cost of fuel, which everything has to travel to where it’s going to and that gets layered in. I think a lot of the grocery stores have tried, at least I’ve read, tried to absorb some of those costs because they know their consumers, their customers won’t come if they are charging higher prices. Ted, let me ask you about artificial intelligence because it’s creeped into everything.
We can debate whether or not that’s another show, whether or not it’s appropriate, not appropriate. How has AI crept into debt consolidation, debt management? Are people seeking the advice of chatbots or AI, large language models?
How accurate is that information?
Ted Rossman, Money Management International
I’m glad you brought this up. People are seeking debt management advice from AI tools. Last year, we saw a six-fold increase in the number of people who came to us through generative AI platforms like ChatGPT and others.
This year, we’ve actually seen another 3x increase just since May when ChatGPT rolled out its personal finance platform. We are seeing a lot of people seeking out this kind of advice. They’re trying to optimize their budgets.
They realize that they’re paying high interest rates on credit cards. I actually think this is part of why more people are seeking personal loans as well because they view this as kind of a DIY approach. Sometimes it works.
Sadly, sometimes it doesn’t. That’s often when people come to us. That’s what we’re there for is to help people.
We are seeing a big uptick in people who are trying to be savvy about this and asking these chatbots about how do I get out of debt. We know about things like 0% balance transfer cards. There’s a time and a place for that.
That works really well if you have good credit and if you have no more than $4,000 or $5,000 or $6,000 in credit card debt. A lot of people are coming to us with higher amounts now. The typical MMI client has about $40,000 in unsecured debt.
A lot of times, roughly half of that is on personal loans. What we’re seeing is a lot of the real optimizers are kind of taking that next step. Maybe they tried something on their own.
It didn’t work. Now they’re going back to the AI drawing board. That’s where organizations like ours can come in and be helpful.
Jeffrey Snyder, Broadcast Retirement Network
Ted, do you ever worry about the accuracy or the biases? This is a whole other show, but it’s something I’ve often thought about. In my professional life, I’ve evaluated tools and calculators.
I always sensed offered by major financial firms. I’ve always sensed that maybe there was a bit of an outcome that some of the tools were focused on. Do you get that sense that there’s a bias at all with any of these LLMs?
You would think they’re programmed by humans. They’re interacting with humans. They’re going to have the biases of humans.
Ted Rossman, Money Management International
Well, there can certainly be mistakes or the so-called hallucinations of AI platforms. There’s definitely times that you get false or misleading information. Sometimes also, the more complex the questions, the more likely the answers might not be on target or might not be on target for you.
That’s another thing. When you’re talking about debt relief or personal finance in general, it’s not a one-size-fits-all kind of thing. I would treat this with a grain of salt similar to other platforms.
Just like we’re not going to believe everything we saw on TV or we read on social media, you don’t want to take everything on AI as absolute fact, but it’s also true that this can really extend our capabilities and really make you more efficient and turn you on to new ideas. Let’s not throw the baby out with the bathwater, but we also don’t want to take everything we read there as absolute fact, because there is definitely some customization required for really any good financial plan. Use it as a starting point, but you want to get some other perspectives as well.
Jeffrey Snyder, Broadcast Retirement Network
That’s where the critical thinking, which I think is so important and maybe lacking in a lot of ways in school and society. Anyway, it’s a whole other issue. Ted, congratulations on the new role.
Great to see you as always. And look, we look forward to having you back on the program again very soon.
Ted Rossman, Money Management International
Me too. Thanks so much.