Education Department Cuts Student Loan Rates for Auto-Pay
The U.S. Department of Education is offering a 1-percentage-point interest rate reduction to federal student loan borrowers who enroll in automatic payments by September 30.
The United States Department of Education is providing a temporary 1-percentage-point interest rate reduction for eligible federal student loan borrowers whose loans originated after July 1, 2012. To secure the reduction, which remains in effect through June 30, 2028, borrowers must enroll in automatic payments by September 30.
Eligibility is generally limited to borrowers who are currently in repayment and in good standing. Those whose loans are in default must first complete rehabilitation or loan consolidation to qualify for the incentive. The program is designed to encourage on-time payments and improve the overall health of the federal student loan portfolio.
Under Secretary of Education Nicholas Kent stated that the Trump Administration intends to make repayment easier and drive up repayment rates through this incentive. Kent noted that the reduction should help borrowers as they consider affordable repayment plans and work to repay their loans on time.
