Student Loan Deadline to Secure Lower Interest Rates Extended Last Minute
Summary
The U.S. Department of Education has extended the deadline to enroll in an automatic payment program that gives a bigger interest rate reduction on student loans to December 31. Nearly two million borrowers have already signed up to save 1% on their loan interest by using auto pay, which helps people make payments on time.Key Facts
- The enrollment deadline for a 1% interest rate cut on student loans through auto pay was extended to December 31.
- The interest rate reduction is four times larger than the usual discount for using auto pay.
- Nearly two million federal student loan borrowers have enrolled in auto pay since the program began.
- The reduction applies to federal loans issued after July 1, 2012, and lasts until June 2028.
- Auto pay helps prevent missed payments and stops interest from building up on loans.
- The program is part of efforts to improve loan repayment rates and the condition of federal student loans.
- The Education Department wants to help borrowers who are in default get back on track, as defaulting can block buying a house or accessing credit.
- The government ended the pandemic pause on student loan repayments, which led to more defaults and changes in repayment plans.
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