Federal student loan borrowers can receive a 1% interest rate reduction by enrolling in auto-pay.

The U.S. Department of Education has announced a new initiative offering a 1% interest rate reduction for federal student loan borrowers who use auto-pay. This benefit applies to those already enrolled or who sign up by September 30, 2026, and will be active from July 2026 to June 2028. The move aims to enhance the affordability of higher education and streamline the repayment process for eligible individuals.