Student Loan Borrowers Benefit From Increased Autopay Discounts

WHO:

The Washington Post - The U.S. Department of Education is involved in the announcement regarding student loan autopay discounts.

NPR - Undersecretary Nicholas Kent of the U.S. Department of Education provided comments on the new autopay discount.

WHAT:

The Washington Post - The discount for student loan borrowers who enroll in autopay has increased to 1 percentage point on the interest rate.

NPR - The interest rate discount for autopay has been temporarily increased from 0.25 percentage points to 1 percentage point.

NPR - An undergraduate borrower with a loan at the current 6.39% interest rate would see their rate drop to 5.39% with the new discount.

WHERE:

NPR - The changes are applicable to student loan borrowers across the United States.

WHEN:

NPR - The new autopay interest rate discount will take effect on July 1, 2026, and will last until June 30, 2028.

NPR - Borrowers have until September 30 to sign up for autopay to qualify for the two-year interest discount.

WHY:

NPR - The increase in the autopay discount is intended to help borrowers pay down their balances more quickly and strengthen the overall health of the federal student loan portfolio.

NPR - The participation rate in autopay dropped from approximately 83% in 2019 to about 40% by late 2025, prompting the need for this incentive.

HOW:

NPR - Borrowers already enrolled in autopay will automatically receive the rate cut without needing to take further action.

(UPDATED June 19, 2026 06:45 UTC)

The U.S. Department of Education has announced an increase in the autopay discount for student loan borrowers, raising it from 0.25 percentage points to 1 percentage point on the interest rate. This means that an undergraduate borrower with a current interest rate of 6.39% will see their rate drop to 5.39% starting July 1, 2026, and this discount will be available until June 30, 2028, with borrowers needing to sign up for autopay by September 30 to qualify. Undersecretary Nicholas Kent emphasized that this initiative aims to help borrowers pay down their balances more quickly and improve the health of the federal student loan portfolio, especially as participation in autopay has significantly declined in recent years.