US Extends Student Loan Auto Pay Interest Rate Cut Deadline to End of 2026

The U.S. Department of Education extended the deadline for student loan borrowers to enroll in auto pay and receive a 1% interest rate reduction to the end of 2026, from the original Sept. 30 cutoff. The reduction lasts through June 2028. Borrowers already using auto pay receive a 0.25% discount, so the new benefit adds 0.75 percentage points — quadrupling the prior reduction. Nearly 2 million borrowers have enrolled since the program was announced this summer. The Education Department said the temporary benefit supports borrowers returning to repayment and helps them stay current on the new Repayment Assistance Plan, which requires on-time payments. About 9 million Americans were in default on federal student loans as of June, with hundreds of thousands more at risk this year. New enrollees must sign up by Dec. 31; those enrolled before July received the 1% cut automatically.