More than half of federal student loan borrowers owe less than $20,000 — here’s where everyone else stands

With all the ongoing conversations around President Joe Biden forgiving $10,000 in debt for federal student loan borrowers — a decision reported to be announced sometime this summer — Americans have been left wondering just how many people this would leave completely debt free.

According to recent data from The Washington Post, most federal student loan borrowers do in fact have small balances and would therefore benefit greatly from having $10,000 wiped away. About a third (33%) of borrowers owe less than $10,000, while another 20% owe less than $20,000.

Here's a look at how everyone's student debt shakes out:

• 33% of borrowers owe less than $10,000
• 20% of borrowers owe between $10,000 and $20,000
• 21% of borrowers owe between $20,000 and $40,000
• 18% of borrowers owe between $40,000 and $100,000
• 7% of borrowers owe $100,000 or more

The numbers show how more than half (53%) of federal student loan borrowers actually have less than $20,000 in debt. With a whopping 43.4 million people in the U.S. having federal student loans, however, that still means there are nearly 20 million adults left with large balances of $20,000 or higher — over three million adults currently have six-figure federal student loan debt.

Even if $10,000 in loan forgiveness would make about a third of federal student loan borrowers debt free, how much of an impact it would make on the rest of the student debt demographic varies.

If President Biden's proposed $10,000 in student loan forgiveness would mean your debt would be completely wiped away, it's easy to want to bank on it happening. Holding out for possible forgiveness means you could potentially get off the hook for having to pay off the rest of your student loans — and who doesn't want that?

The obvious risk here is there's always a chance President Biden doesn't actually go through with forgiving $10,000 in student loan debt, or any debt at all. Or perhaps there's a maximum income threshold to qualify for forgiveness that you end up exceeding.

As long as the federal student loan payment and interest freeze is in effect — now through Aug. 31, 2022, and perhaps even longer — you can get away with not making payments toward your student loans and not accruing interest. There's no cost to you for holding off.

During this time, however, you should consider setting aside those monthly payments you would otherwise make so the money is still there should forgiveness fall through by the time the payment and interest freeze ends.

Both the Marcus by Goldman Sachs High Yield Online Savings account and the *American Express® High Yield Savings Account offer above-average interest rates, have zero monthly fees and require no minimum balance to open an account.

Stashing this cash in a high-yield savings account for the time being helps you buy time while we wait to hear about any loan forgiveness, and for the forbearance to end. Plus, with interest rates rising, you'll be able to score a better return on your savings today than you could a year or two ago.

It's very likely that President Biden won't cancel more than $10,000 worth of debt per federal student loan borrower, if that.

For those who owe more than $10,000, continuing to make payments on your debt until you reach that $10,000 threshold won't hurt you since there's a good chance you'll owe it anyway. With the payment and interest freeze in effect right now, any amount paid will go directly toward chipping away at your principal amount. You'll finally be able to make a considerable dent in your debt, while narrowing down your remaining balance to as low as you can get it.

For those with private student loans, remember that the federal student loan payment and interest freeze does not apply to private loans, and reports indicate that Biden is unlikely to cancel private student loan debt. If you do have a private loan and want to make your payments more manageable, you should consider refinancing your loan to get a better interest rate or payment terms.

Select ranked SoFi* as the best overall lender for student loan refinancing.

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*For the American Express® High Yield Savings Account, there is no minimum balance required to open your Account, to avoid being charged a fee, or to obtain the Annual Percentage Yield (APY) disclosed to you

* Fixed rates range from 3.99% APR to 9.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Variable rates range from 5.74% APR to 9.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 5/6/26 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. You may pay more interest over the life of the loan if you refinance with an extended term. Autopay Discount: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly payments as outlined in your loan agreement by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. When the autopay interest rate deduction is added or removed, the next time the loan is re-amortized (quarterly for fixed rate loans; monthly for variable rate loans),the principal balance of your loan will be spread over the remaining loan term, and your monthly payment amount will change. This benefit is suspended during periods of deferment, grace period, or forbearance. Autopay is not required to receive a loan from SoFi. Member Rate Discount: To be eligible for an additional 0.125% interest rate reduction on a Student Loan Refinancing, you must, within 31 days of loan funding, either (1) be a SoFi Plus subscriber, (2) receive an Eligible Direct Deposit into a SoFi Checking or Savings account, or (3) receive at least $5,000 in Qualifying Deposits into a SoFi Checking or Savings account. You must continue to meet at least one of the above eligibility criteria every 31 days to maintain the discount. See the SoFi Plus terms for details on SoFi Plus subscription. For more details on Eligible Direct Deposit or Qualifying Deposits, please see https://www.sofi.com/legal/banking-rate-sheet. Once you become eligible during the initial period, the discount will be removed or reinstated depending on whether the criteria have been met. Each time your loan is re-amortized, your monthly payment amount will change based upon the interest rate that was in place. SoFi reserves the right to modify or terminate this offer at any time for unenrolled participants. You are not required to meet these criteria to be approved for a loan. SoFi Plus Discount: To be eligible to receive an additional (0.125%) interest rate reduction on your Student Loan Refinancing (your "Loan") for enrolling in SoFi Plus, you must enroll in SoFi Plus within 30 days of Loan funding, either by receiving an Eligible Direct Deposit to your SoFi Checking and Savings account, or by paying the SoFi Plus Subscription Fee. Once eligible, you will receive this discount during periods in which you have received Eligible Direct Deposit to your SoFi Checking and Savings Account, or during periods in which SoFi successfully receives payment of the SoFi Plus Subscription Fee. This discount lowers your interest rate but does not change the amount of your regular monthly payment. This discount will be removed during periods in which SoFi determines you have turned off Eligible Direct Deposit to your Checking and Savings account or in which you have not paid the SoFi Plus Subscription Fee. SoFi reserves the right to change or terminate this interest rate reduction offer for unenrolled participants at any time without notice. You are not required to enroll in Eligible Direct Deposit or to pay the SoFi Plus Subscription Fee to be eligible for Loan approval. See what qualifies as an Eligible Direct Deposit here: www.sofi.com/terms-of-use/#slr-discount
Eligible Direct Deposit means regularly recurring deposit of regular income to an Automated Clearing House ("ACH") Network during a 30-Day Evaluation Period (as defined below). Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not generate payments that are detectable by our system. So qualifying direct deposits are those where the student loan refinance discount rate is applied automatically for each month where you have an Eligible Direct Deposit of at least $1,000 per 30-day Evaluation Period. Eligible Direct Deposit does not include transfers between accounts you own, refunds, rebates, reimbursements, stimulus payments, merchant refunds, or payments from person-to-person payment services (such as Venmo). To qualify for the 0.25% interest rate reduction, the direct deposit must be recurring and paid directly into a SoFi Checking or Savings account. For the avoidance of doubt, deposits made via check, cash, or mobile check deposit are not eligible. Direct Deposit eligibility is determined by SoFi's sole discretion. The 30-Day Evaluation Period refers to the period starting on the "Start Date" and ending on the "End Date" set forth on the App Details page of your account, which comprises a period of 30 calendar days (the "30-Day Evaluation Period"). You can access the APV Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking → Checking → APV or (ii) Banking → Checking → APV Details. If you do not qualify for the discount during the initial 30-Day Evaluation Period, your loan will not be eligible for a discount unless you re-qualify in a later 30-Day Evaluation Period. If you qualify during the 30-Day Evaluation Period, the discount will be applied on a going-forward basis only. SoFi Bank determines eligibility. If you have a joint account, each account holder receives Eligible Direct Deposits into your SoFi Checking and Savings account, then you will be eligible for all SoFi Plus benefits, including on accounts you hold in your own name. Federal Loan Disclosure: Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELiIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligiblity. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).