The US Department of Education is giving federal student loan borrowers more time to lock in a temporary 1% interest rate reduction through automatic payments.

What to know

  • Enrol in automatic payments by 31 December 2026 — or be already enrolled — to get the 1% interest rate cut
  • The reduction applies through 30 June 2028
  • It covers federal student loans; borrowers already on autopay get the cut automatically

Why it matters

A 1% cut on a typical student loan balance can save hundreds of dollars over the life of the loan. With the deadline at the end of the year, borrowers who are not yet on autopay should check their loan servicer’s portal and enrol before 31 December 2026.

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