Student Loan Autopay Discount Deadline Extended to Dec. 31

Federal student loan borrowers have three more months to lock in a larger interest rate discount. On Sept. 29, 2026, the U.S. Department of Education extended the enrollment period for its 1% student loan autopay discount from Sept. 30 to Dec. 31, 2026. Borrowers who enroll in auto pay by the new deadline, or who are already enrolled, get the reduced rate through June 30, 2028.

The department says nearly 2 million borrowers have enrolled in auto pay since it announced the discount on June 18.

How the 1% Autopay Discount Works

Auto pay lets your loan servicer take your monthly payment directly from a checking or savings account. Before July 1, 2026, the student loan autopay discount was 0.25 percentage points. The temporary benefit raises that to a full 1 percentage point for borrowers who sign up by Dec. 31.

• Already on auto pay? You do not need to do anything. The department says borrowers who were enrolled when the extension was announced have already had their rate adjusted to the 1% reduction.
• Not enrolled yet? Log in to your student loan servicer's website, choose "auto pay" from the menu, enter your bank details and confirm your payment amount.
• How long it lasts: through June 30, 2028, as long as you stay enrolled in auto pay and keep meeting the eligibility rules.

On a $30,000 balance, one percentage point is roughly $300 a year in interest at the start of repayment. Your actual savings depend on your balance, rate and repayment plan.

Which Student Loans Qualify

According to the Education Department, the discount applies to borrowers whose federal Direct Loans originated after July 1, 2012. That includes student and parent borrowers. The department also says it covers:

• borrowers who were in the now-defunct SAVE Plan and have moved to a different repayment plan;
• borrowers in default, once they bring their loans back into good standing.

Private student loans are not part of this federal benefit. Borrowers in default must first log in to StudentAid.gov, consolidate eligible loans and choose a new repayment plan before they can enroll in auto pay, the department says.

Why Auto Pay Matters Under the New Repayment Rules

The department ties the discount to its new income-driven plan, the Repayment Assistance Plan (RAP), which became available on July 1, 2026, alongside a new Tiered Standard plan. Under RAP, borrowers who make full, on-time payments can get a match that keeps unpaid interest from piling up and their balance falling each month, according to the department. On-time monthly payments also count toward Public Service Loan Forgiveness, which discharges eligible loans after 120 payments.

"We are excited to see millions of borrowers take advantage of this temporary benefit," Under Secretary of Education Nicholas Kent said in the Sept. 29 announcement.

Things to Check Before You Sign Up

• Your bank balance on payment day. A failed payment can interrupt auto pay. Choose a draft date that falls after payday.
• Your repayment plan. If you were in SAVE and have not picked a new plan, do that first. The department says applying for an income-driven plan is fastest when you consent to let it pull your tax information from the IRS.
• Your servicer's confirmation. Save the confirmation email or screenshot showing your enrollment date before Dec. 31.
• Your interest rate afterward. Check your next statement to confirm the 1-point reduction appears.

Students Still in School

If you are still borrowing, the discount matters once you enter repayment, and the rules for new loans have also changed. Graduate students starting programs now face new federal limits, which we explain in Grad PLUS Loans Eliminated. Undergraduates applying for aid for next year can already file the 2027-28 FAFSA.

What Borrowers Should Do Now

• Enroll in auto pay by Dec. 31, 2026 through your loan servicer to lock in the 1% discount.
• Confirm your plan if you were in SAVE or in default.
• Keep auto pay active. Leaving auto pay ends the benefit.
• Watch your statements to make sure the lower rate is applied.

Details are from Education Department announcements dated June 18 and Sept. 29, 2026. This article is general information, not financial advice.