Trump administration temporarily boosts student loan autopay discount
A student student sits in a lecture hall during class break at the University of Texas at Austin, Texas, on February 22, 2024.
Brandon Bell | Getty Images
Trump administration announced On Thursday, it announced it would offer a 1 percentage point discount on interest rates starting July 1 to federal student loan borrowers who sign up for automatic payments.
Borrowers using automatic payment can currently benefit from a 0.25 percentage point discount.
Federal student loan holders who are not yet enrolled in automatic payments must do so by Sept. 30 if they want to take advantage of the lower interest rate. The discount will continue until June 30, 2028.
“The Trump Administration is making student loan repayment easier than ever before, and borrowers should not wait to take advantage of this temporary interest rate reduction to enjoy essential student loan benefits,” Undersecretary of Education Nicholas Kent said in a statement.
The announcement comes as tens of millions of borrowers are preparing for a major overhaul of the federal student loan system this summer due to changes in President Donald Trump’s “big, beautiful bill.” The law narrows borrowers’ affordable repayment plans and other relief measures.
More than 42 million Americans have federal student loans, with outstanding debt exceeding $1.6 trillion, according to the Congressional Research Service.
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