Student Loan Update: Two Major Changes Coming for Federal Borrowers
Summary
The U.S. Departments of Education and Treasury announced two changes for federal student loan borrowers. They extended the deadline for getting a 1% interest rate reduction through autopay to December 31, 2024, and created a new online support center to help borrowers with defaulted loans get back on track.Key Facts
- The deadline to enroll in autopay for a 1% interest rate cut was extended from September 30 to December 31, 2024.
- The interest rate reduction applies to eligible Direct Loans and can last until June 30, 2028.
- Nearly 2 million borrowers have signed up for autopay to get the discount so far.
- The Education Department and Treasury launched a Defaulted Loans Support Center to assist borrowers who have stopped paying their loans.
- Over 42 million Americans have federal student loans, totaling more than $1.7 trillion.
- The new support center aims to make it easier for defaulted borrowers to restart payments and avoid complicated paperwork.
- Borrowers must have loans in good standing to qualify for the interest rate discount.
- These changes are part of efforts under President Donald Trump’s administration to improve repayment rates and manage the federal student loan portfolio.
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