Federal Student Loan Auto-Pay Discount Temporarily Increased

The U.S. Department of Education has announced a temporary increase in the interest rate reduction for federal student loan borrowers who enroll in auto-pay. From July 2026 to June 2028, the discount will be one percentage point, up from the usual 0.25%. This initiative aims to encourage greater participation in auto-pay, which saw a decline following the COVID-19 repayment pause.