The Education Department has extended its offer for a 1% interest rate reduction on student loan balance for certain borrowers who qualify.
Borrowers have from now until the end of the year to sign up for auto pay and get the benefit. Once approved, they will keep that reduced rate through June of 2028. Loan holders will need to enroll through their respective loan service company.
Borrowers who are currently already auto-paying their loans will automatically qualify for the reduced rate as long as they continue repayment in good standing, the Education Department said. If auto pay is canceled or if a borrower moves to forbearance, the rate reduction will be canceled.
RELATED STORY | Student loan payments rise as new push in Washington targets interest rates
Student loan payments for many have only gone up this year after the Department of Education restructured repayment plans in the aftermath of courts blocking former President Joe Biden's initiatives.
Loan forgiveness has become more complicated, too. The Trump administration confirmed to Scripps News earlier this year that coding errors were recently found and corrected involving Public Service Loan Forgiveness, meaning forgiveness for many now has a later date.
Overall consumer borrowing has also increased in recent months, driven largely by non-revolving debt, which includes student loans.
