Student loan debt hits another record high despite payment forbearance

The Laurel Road Student Loan is no longer available to new applicants. 

Student debt hit another all-time high in the first quarter of 2022, reaching $1.59 trillion, according to data released by the Federal Reserve Bank of New York on Tuesday.

This debt category accounts for just over 10% of total household debt, which is nearing a whopping $16 trillion. This is the second-largest category of consumer debt, behind home mortgages.

This news comes amid rumors that the Biden administration is considering $10,000 in federal student debt forgiveness, and after another extension of the federal student loan payment forbearance until Aug. 31. However, private student loans have continued to accrue interest and require repayment throughout the pandemic, which may partially explain the hike in total debt — despite only making up between 7-10% of total student debt. Additionally, new loans for current and new students are adding to the total debt.

Whether you have public or private student loans, it's likely a burden on overall your financial picture. And while the government may take action to forgive some student loan debt, nothing is guaranteed. Here's what you can do in the meantime.

For many Americans, student debt has become a barrier to achieving financial prosperity and life goals. 81% of people with student loans say that student loan payments have forced them to delay key life milestones, such as saving for retirement or buying a home, according to a January 2022 CNBC + Acorns survey conducted by Momentive.

And the problem continues to be exacerbated, as Fed data indicates that total student debt has increased nearly 10% since the third quarter of 2018.

However, some borrowers have been awarded relief as the Department of Education has been working on issues with the Public Student Loan Forgiveness program. In April, the Department announced sweeping changes to the program, with the hope of immediately canceling over 40,000 loans for those who met the listed requirements. Recent posts on the Public Service Loan Forgiveness subreddit show stories of borrowers logging into their portals to find their debts completely erased.

If you don't qualify for PSLF or other student loan debt forgiveness, there are ways to pay down your student debt aggressively.

If you currently have public student loans, it's widely agreed to keep your loans within the federal student debt system for now. As long as you have a 0% interest rate, and the looming possibility of government-enacted forgiveness, there's no harm in leaving your debt there for the time being. In fact, it may be a good idea to pay it down so all of your money goes towards the principal, rather than interest.

However, once interest begins accruing again, you may consider refinancing your student loans. In my own experience, aggressively refinancing the interest rate down as well as paying the balance down allowed me to dig myself out of nearly $80,000 in student debt in less than seven years.

Refinancing your student loans is quite simple, and you can get started with a servicer like SoFi* or Laurel Road by checking the rates you qualify for. Once you find a rate and repayment plan that fits your budget, you can quickly have your loans processed and refinanced.

Student debt continues to grow and is not solely focused on young people, as the Fed data also shows older Americans are struggling to pay down their debt. However, there are strategic financial moves you can make during the federal student loan forbearance period.

If your student debt is currently at 0% or a low-interest rate, you may want to prioritize investing for the future. While I still have $8,000 in student debt at 2.25% APR through a personal line of credit, the few dollars per month I pay in interest per month should be worth the gains I see from my investments. So if your interest rate is manageable, consider running the math of what would make more sense.

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* 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).