Student loan borrowers have until 11:59 p.m. ET on Sept. 30 to enroll in an expanded federal autopay discount. The Department of Education increased the discount from 0.25% to 1% for eligible federal student loans in repayment.
The temporary 1% discount runs through June 30, 2028. After that, the autopay discount is set to return to 0.25%. Borrowers who miss the Sept. 30 deadline may still qualify for the standard discount, but not the temporary boost.
How Much Could the Added Discount Save?
For a $10,000 loan at a 7% interest rate with a 15-year repayment term, the monthly payment would be:
- $89.88 without an autopay discount
- $88.49 with the standard 0.25% discount
- $84.39 with the temporary 1% discount
The example uses the Bankrate Student Loan Calculator. Your savings depend on your loan balance, rate and repayment term. The interest-rate reduction can also mean less interest accrues over time, allowing more of each payment to go toward principal.
Borrowers who have not enrolled have already missed two months of the temporary savings, which began July 1. But signing up by the deadline still leaves more than 18 months to use the larger discount.
Other Potential Benefits of Autopay
Automatic payments can help borrowers avoid missing a due date, which may support a stronger credit history. A higher credit score can help borrowers qualify for better terms on other borrowing, such as a car loan or mortgage.
Autopay can also create a risk of overdrafts if the account does not have enough money when the payment is withdrawn. Before enrolling, check the scheduled amount and make sure the linked bank account is funded.
How to Sign Up for the Discount
Sign in to your federal loan servicer’s account and add your bank information under its autopay settings. You may be able to choose a payment above the minimum during enrollment.
If you do not know your servicer, sign in at StudentAid.gov and look for the My Loan Servicer section. Borrowers with private student loans should check their lender’s website for any separate autopay discount.
The expanded discount applies only to federal student loans in repayment status. Confirm your loan’s eligibility and the discount shown by your servicer before the Sept. 30 deadline.
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