Key facts
- Student loan borrowers can receive a temporary 1-percentage-point interest rate reduction by enrolling in autopay.
- The deadline to enroll in autopay for this benefit is September 30.
- The interest rate reduction will be in effect from July 1, 2024, through June 30, 2028.
- Borrowers already using autopay will see an additional reduction of three-quarters of a percentage point.
- This initiative aims to increase repayment rates and improve the federal student loan portfolio's financial health.
Student loan borrowers have a limited window to enroll in a temporary interest rate reduction program. By signing up for autopay by September 30, borrowers can secure a 1-percentage-point decrease in their student loan interest rates, effective immediately and lasting until June 30, 2028. This initiative is part of the Department of Education's broader efforts to improve repayment rates and the overall health of the federal student loan portfolio. Borrowers already enrolled in autopay will automatically receive an additional three-quarters of a percentage point reduction, bringing their total benefit to 1.25 percentage points. The program applies to direct federal loans disbursed after July 1, 2012, and excludes borrowers in default until they return to good standing. The Department of Education is also implementing a repayment overhaul aimed at simplifying the system and incentivizing colleges to reduce tuition, though some borrowers are currently navigating administrative errors and higher monthly payments.