Education Department Offers 1% Student Loan Rate Cut Through 2028 for Autopay

3 articles · Updated · CNBC · Jun 24

Eligible federal student loan borrowers who enroll in autopay will get a 1 percentage point interest-rate reduction starting July 1, with the temporary break running through June 30, 2028.
The offer expands the usual 0.25-point autopay discount and could trim monthly bills for some of the more than 40 million Americans with student debt, whose average federal loan rate is about 6.54%.
Direct Loan borrowers — including Direct Subsidized, Unsubsidized, PLUS, Consolidation and qualifying Parent PLUS loans — can receive it if their loans were disbursed on or after July 1, 2012; FFEL and private loans are excluded.
Borrowers already on autopay will receive the lower rate automatically, while others must sign up by Sept. 30, 2026; borrowers in default must first return their accounts to good standing.
Consumer advocates say autopay usually carries little downside, but servicing errors have occurred, and borrowers charged the wrong amount should seek a prompt refund and reimbursement for related fees.