Last Updated: October 20, 2026
Federal student loan borrowers can still get the student loan autopay 1% interest rate discount if they enroll by Dec. 31, 2026.
The Department of Education extended the deadline from Sept. 30. The discount lasts through June 30, 2028.
This applies to U.S. federal student loans only. Private loans and non-U.S. loans do not qualify.
- Deadline: Dec. 31, 2026 (extended from Sept. 30).
- Discount size: 1% off your interest rate, up from 0.25%.
- End date: The reduced rate lasts through June 30, 2028.
- Who qualifies: Eligible federal Direct Loan borrowers in good standing.
The Department announced the extension on Sept. 29, 2026. Nearly 2 million borrowers have already enrolled in auto pay, according to the Department.
What Changed on July 1, 2026
Before July 1, 2026, auto pay gave federal borrowers a 0.25% interest rate reduction.
Starting July 1, 2026, the reduction grew to 1%. That is four times larger than the old discount.
Who Gets the Extra 0.75% Automatically
Borrowers already on auto pay did not have to do anything. They received the extra 0.75% automatically.
Their total reduction is now 1%, not 1.25%. The extra 0.75% brings the old 0.25% up to the full 1%.
Who Needs to Act
Borrowers who are not on auto pay must enroll to get the discount. The window closes at the end of 2026.
Enrolling in auto pay also requires being in a repayment plan. If you are not in one, set that up first.
What the Discount Does Not Do
The reduction lowers your interest rate. It does not lower your loan balance.
For example, a loan with a 6% rate would drop to 5% while the benefit applies.
Who Qualifies for the 1% Interest Rate Reduction
Eligibility depends on your loan type and your account status. Use this checklist.
You Likely Qualify If
- You have Federal Direct Loans originated after July 1, 2012.
- Your loans are in good standing.
- You are in a repayment plan that allows auto pay.
- You enroll in auto pay by Dec. 31, 2026, or you are already enrolled.
Parent PLUS Borrowers Are Included
Student borrowers and Parent PLUS borrowers can both qualify. The loan must still meet the Direct Loan and date rules above.
You Do Not Qualify If
- Your loans are Federal Family Education Loan (FFEL) loans.
- Your loans are private student loans.
- Your loans are in default and not yet back in good standing.
Not sure which loan type you have? Log in to StudentAid.gov. It lists every federal loan on your account.
How to Enroll in Student Loan Autopay
Enrollment takes a few minutes. Auto pay is optional. It pulls your monthly payment from a checking or savings account.
- Log in to your loan servicer account.
- Select “auto pay” from the menu.
- Enter your checking or savings account details.
- Review the payment amount and the withdrawal date.
- Submit the form and save your confirmation.
- Check back in a few days to confirm auto pay shows as active.
Do not wait for the last week of December. Servicers can get busy near deadlines.
Deadline Timing
Enroll by the end of the day on Dec. 31, 2026. Some news outlets reported a cutoff of 11:59 p.m. Eastern.
That exact time is reported, not confirmed on ed.gov. Verify on StudentAid.gov. Safer still, enroll days early.
How to Keep the Discount Until June 30, 2028
Enrolling is not enough. You must stay enrolled in auto pay and keep meeting the eligibility rules.
If you qualify, the reduced rate runs through June 30, 2028. After that date, the temporary discount ends.
Habits That Protect Your Discount
- Keep enough money in your bank account before each withdrawal.
- Update your bank details if you change accounts.
- Keep your loans in good standing.
- Check your servicer messages regularly.
What Can End the Discount
News outlets reported that canceling auto pay ends the reduction. They also reported that moving to forbearance or deferment ends it.
These points are reported, not confirmed on ed.gov. Verify on StudentAid.gov before you change your account.
PSLF Bonus
Auto pay also helps borrowers working toward Public Service Loan Forgiveness (PSLF). On-time monthly payments matter for that goal.
Already on Autopay? What to Check
If you enrolled before the July 2026 change, you should already have the 1% reduction. Still, confirm it.
How to Confirm Your Rate
- Log in to your loan servicer account.
- Open your loan details or account summary.
- Find the current interest rate for each loan.
- Compare it to the rate you had before July 2026.
- Confirm that auto pay shows as active.
Menu names vary by servicer. Look for terms like “loan details,” “interest rate,” or “payment settings.”
When to Contact Your Servicer
Contact your servicer if your rate looks unchanged. Also call if auto pay shows as inactive.
Ask them to confirm your discount status in writing. Keep a record of the date and the representative’s name.
SAVE Plan Borrowers: What You Must Do First
If you are in the old SAVE plan, you cannot simply turn on auto pay and get the discount.
You must first move to another lawful repayment plan. Then enroll in auto pay.
Steps for SAVE Borrowers
- Log in to your servicer account or StudentAid.gov.
- Check which repayment plans you can choose.
- Switch to an eligible repayment plan.
- Enroll in auto pay after the switch is complete.
- Confirm your new rate in your servicer dashboard.
Do this early. Plan changes can take time to process. Leave room before Dec. 31.
Plan options and processing times can change. Check StudentAid.gov for the current list of available plans.
Need more on the SAVE transition? See [LINK: SAVE plan final notice].
In Default? Get Back to Good Standing First
Borrowers in default must first return their loans to good standing. Only then can they get the discount.
The Department of Education and the Treasury Department also launched a Defaulted Loans Support Center on StudentAid.gov.
Ways Out of Default at a High Level
- Rehabilitation: A process where you make agreed payments to restore good standing.
- Consolidation: Combining eligible loans into a new Direct Consolidation Loan.
Each option has its own rules and timelines. Check StudentAid.gov to see which one fits your loans.
Start soon. Getting out of default takes time, and the Dec. 31 deadline is fixed.
How Much Could You Save?
Estimate only: Here is one simple example. Your actual savings will differ.
| Item | Example |
|---|---|
| Loan balance | $20,000 |
| Extra reduction (1% minus old 0.25%) | 0.75% (0.0075) |
| Estimated extra yearly savings | About $150 per year |
| Total 1% reduction on the same balance | About $200 per year |
This math assumes the balance stays the same for a year. Your balance will change as you pay.
Real savings depend on your loan balance, your interest rate, and your repayment plan.
Even small savings add up. The discount runs through June 30, 2028, so the benefit can last well beyond one year.
Autopay Not Working or Payment Not Showing?
Auto pay can fail for simple reasons. A bank change, a typo, or a servicer delay can all cause trouble.
If a payment is missing, read our guide on what to do when a student loan payment is not showing on your account.
More help is coming for related problems:
- [LINK: student loan payment pending but bank charged]
- [LINK: student loan autopay not working]
- [LINK: SAVE plan final notice]
Quick Fixes to Try First
- Confirm your bank account and routing numbers are correct.
- Make sure your account had enough funds on the withdrawal date.
- Check your servicer inbox for failed payment notices.
- Contact your servicer and ask for written confirmation of your auto pay status.
A failed auto pay payment can put your discount at risk. Fix it quickly.
Frequently Asked Questions
What is the deadline to enroll in student loan autopay for the 1% discount?
The deadline is Dec. 31, 2026. The Department of Education extended it from Sept. 30. Enroll by the end of the day on Dec. 31, 2026, and verify any exact cutoff time on StudentAid.gov.
Do I need to do anything if I’m already on autopay?
No enrollment is needed. Borrowers already on auto pay received the extra 0.75% automatically. Still, check your servicer dashboard to confirm your rate and your active auto pay status.
Do private student loans qualify for the 1% discount?
No. Private student loans do not qualify. FFEL loans are also excluded. Only eligible federal Direct Loans originated after July 1, 2012, can receive the discount.
Do Parent PLUS loans qualify?
Yes. Parent PLUS borrowers can qualify if the loan is a Direct Loan originated after July 1, 2012. The loan must also be in good standing.
Will I lose the discount if I switch to forbearance or deferment?
Possibly. News outlets reported that canceling auto pay or moving to forbearance or deferment ends the reduction. This is not confirmed on ed.gov, so verify on StudentAid.gov first.
Can SAVE plan borrowers get the 1% discount?
Yes, but not directly. SAVE borrowers must first move to another lawful repayment plan. After that, they can enroll in auto pay and qualify if they meet the other rules.