Deadline to Reduce Your Student Loan Interest Rate Extended: What to Know
The department said nearly two million borrowers have already enrolled, and the discount can save hundreds or thousands of dollars over a loan’s life.
- On Wednesday, the U.S. Department of Education extended the enrollment deadline for its 1 percentage point autopay interest rate reduction from September 30 to December 31, 2026, giving borrowers three additional months to secure the benefit.
- The department launched this incentive program earlier this year to encourage automatic payments, which help borrowers access benefits under the new Repayment Assistance Plan requiring on-time payments to prevent interest accumulation.
- Nearly 2 million borrowers have enrolled in autopay since the summer to lock in the 1 percentage point interest rate reduction, which is four times larger than the previous 0.25 percentage point standard discount.
- Education Secretary Linda McMahon said the extension aims to help borrowers in default regain stability; enrolled borrowers will receive the reduced rate through June 30, 2028, provided they maintain on-time payments.
- With outstanding federal student loan debt reaching around $1.7 trillion, officials advise borrowers to stress-test monthly budgets before December 31, as missed payments can void the discount and trigger late fees.
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The U.S. Department of Education confirmed that borrowers will have three additional months to enroll in the automatic payment and obtain a temporary reduction of one percentage point in the interest rate. The benefit will be in effect until June 2028.
US Department of Education extends enrollment period for 1% interest rate reduction benefit by 3 months
WASHINGTON — The U.S. Department of Education has extended the enrollment period for the 1% interest rate reduction benefit by an additional three months. Borrowers who enroll in auto pay by Dec. 31, 2026, or those who are already enrolled, will receive the interest rate reduction through June 30, 2028. The additional interest rate reduction will benefit all borrowers whose Federal Direct Loans originated after July 1, 2012, the department said.…
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