Even with regular payments, student loan balances are increasing

If you’re not worried about paying back student loan debt, you can consider yourself pretty lucky. About 43 million Americans currently carry a federal student loan, according to the New York Federal Reserve, while total student loan debt passed $1.6 trillion in the three months before June this year.

It's no surprise that many are struggling with student loans, but a new study from the Fed shows that even those who are making regular payments aren't getting very far. "Only about 36% of borrowers who were still current on their loan in the second quarter of 2019 had reduced their balance over the past twelve moths," the Fed said. They also issued a stark warning: "Slow repayment has long-lasting consequences."

According to the study, 10 years after leaving school, 2005 graduates had repaid less than 40% of their outstanding balances. While 2010 graduates were worse off, with only 9% of their balances repaid five years after graduating. A third of borrowers owe less than $10,000, while 7%, equating to 3 million people, have balances of $100,000 or more in education debt.

But there are ways to combat high interest rates and pay off your debt. Here are a few ways Forbes says you can make paying off student loans a little easier:

Make an extra student loan payment. In addition to paying more than the minimum payment amount, another way to pay off your student loan faster is to make an extra payment. By making an extra payment once every three months you'll end up making 16 payments per year. The payment amount should be based on what you can afford, but be sure to contact your lender and specify that the extra payments should be applied "to principal only" as opposed to the next monthly payment.

Make a lump-sum student loan payment. While it's tempting to spend extra cash like bonuses and tax refunds, a better use of those funds would be to go toward your student loan debt. A lump sum extra payment calculator shows how much money you can save with a one-time, lump sum student loan payment.

Refinance your student loans. One of the best ways to lower the interest on your student loan is to refinance. "There are multiple student loan lenders who offer interest rates as low as 2.50% - 3.00%, which is substantially lower than federal student loans and in-school private loan interest rates," Forbes said. If you're considering going this route, it's helpful to know that when you refinance, lenders typically look at your credit score, income and debt-to-income ratio, among other factors.