Student Loan Update: Borrowers Face Deadline to Secure Lower Interest Rates
Summary
The U.S. Department of Education is offering a temporary 1% interest rate reduction on federal student loans for borrowers who sign up for automatic payments by September 30, 2024. This lower rate will apply until June 30, 2028, aiming to help borrowers save money and manage repayments more easily.Key Facts
- Borrowers can get a 1 percentage point interest rate cut by enrolling in auto-pay by September 30, 2024.
- The reduction started on July 1, 2024, and lasts through June 30, 2028.
- Auto-pay means monthly loan payments are automatically taken from a bank account.
- This is an increase from the usual 0.25% interest rate reduction for using auto-pay.
- The offer applies only to Federal Direct Loans given out on or after July 1, 2012.
- Borrowers who are in default on their loans must fix their account before qualifying.
- The rate reduction stops if a borrower pauses payments through deferment or forbearance.
- The program is part of President Trump’s student loan changes designed to make repayments easier.
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