Here is how to qualify for a bigger student loan autopay discount
Department of Education is raising its autopay interest rate discount from 0.25% to 1% for two years
(InvestigateTV) — The Department of Education is quadrupling its autopay discount for federal student loan borrowers, but enrollment must happen by Sept. 30 to qualify.
Autopay allows borrowers to link a bank account so student loan payments are deducted automatically each month. Robert Farrington, with The College Investor, explained the new incentive.
“The new incentive is that they are raising the interest rate discount from 0.25% to 1% of your student loan interest for the next two years,” Farrington said. “So to qualify, you need to enroll in autopay by September 30th of 2026, and you’ll enjoy this extra autopay discount all the way until July of 2028.”
The discount period runs for almost two years. Since student loan payments remain fixed whether a borrower is on a standard repayment plan or an income-driven plan, Farrington recommends confirming what the payment will be for at least the next 12 months before signing up.
“If you’re finding that student loan payment is a little hard to make, make sure that you are on the right repayment plan for your current income,” Farrington said. “This could mean changing to an income-driven repayment plan if you’re not already on one. It could also mean recertifying your income if your income has changed since you last certified.”
Borrowers who lose a job, take a pay decrease or have their hours reduced while enrolled in autopay can recertify their income using current pay stubs. That step can lower payments on income-driven repayment plans.
To qualify for the autopay discount, student loans must have been first disbursed after July 1, 2012. The deadline to enroll in autopay is Sept. 30.
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