Student loan borrowers have more time to reduce interest rates. Here's what to know
Summary
The U.S. Department of Education has extended the deadline to enroll in autopay for student loans until the end of 2026, allowing borrowers to receive a 1% interest rate reduction. This change aims to help borrowers manage their loans and keep up with new repayment rules.Key Facts
- The deadline to sign up for autopay and get a 1% interest rate discount is now December 31, 2026.
- This 1% reduction lasts through June 2028.
- Borrowers already using autopay get a 0.25% discount; the new benefit adds 0.75% more for a total of 1%.
- About 2 million borrowers started using autopay since the summer announcement.
- Around 9 million Americans are currently in default on federal student loans as of June 2024.
- Borrowers in default can consolidate loans into a single loan with fixed payments by applying online.
- Loan consolidation typically takes about 60 days and can only be done once.
- A loan rehabilitation program exists to help borrowers exit default by making five on-time payments.
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