Borrowers have until the end of 2026 to take advantage of a student loan interest reduction rate, if they enroll for on-time payments.
According to the Department of Education, borrowers who are enrolled or newly enrolled in auto pay can benefit from an interest reduction rate. Here’s what you need to know.
How much is the student loan interest reduction rate?
Usually, auto-pay enrollees receive a 0.25% interest reduction rate from servicers.
With this temporary offer, auto pay enrollees can expect to have their interest rate reduced by 1% for a limited time.
When is the last day to get the student loan interest reduction rate?
Borrowers need to be enrolled in auto pay before the end of the year (Dec. 31, 2026).
How long does the interest rate reduction last?
The 1% interest rate reduction will last through June 30, 2028 for eligible borrowers.
To receive the benefits, borrowers must remain enrolled in auto pay and meet all eligibility requirements.
Who qualifies for student loan interest reduction?
Aside from being enrolled in auto pay, the Department of Education press release states that the reduced rate will benefit borrowers whose loans originated after July 2012.
This includes borrowers enrolled in the SAVE Plan (now defunct) and those enrolled in other lawful repayment plans. It also includes those currently in default when they bring their loans back into good standing.
Kaitlyn McCormick is a Philadelphia-based reporter writing all things cost of living related for USA TODAY.
Reporting by Kaitlyn McCormick, USA TODAY NETWORK / USA TODAY
USA TODAY Network via Reuters Connect
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