Just the Tip:
Federal student loan autopay now cuts your interest rate by a full percentage point, up from a quarter point, but only if you’re enrolled by September 30. Log in to your servicer this week and turn it on. Ten minutes buys you the lower rate through June 2028.
The old quarter-point discount was small enough to ignore. A full point is not.
On a $50,000 balance it is about $500 a year of interest, and the extra three-quarters of a point over the old discount is about $375 of that. That is our arithmetic on a flat balance for the first year. The saving shrinks as you pay the loan down.
The Department of Education (ED) raised the reduction from 0.25% to 1% on July 1, 2026. It covers Direct Loans disbursed on or after July 1, 2012, student and parent borrowers alike, and runs through June 30, 2028. Borrowers already on autopay got the extra 0.75% automatically. Everyone else has to enroll by 11:59 p.m. ET on September 30, 2026, and ED’s own figures say that is most people. Only 40% of borrowers in active repayment use autopay, down from more than 80% before the pandemic.
Autopay lives with your servicer, not on StudentAid.gov, so log in there. If you’ve lost track of who services your loans, your StudentAid.gov dashboard names them. Find Auto Pay or Auto Debit under payments, enter the routing and account numbers for a checking account you keep funded, and accept the authorization. Keep the confirmation email, and check that the lower rate shows up on your statements.
Three catches. The discount switches off during deferment or forbearance, and the SAVE forbearance counts, so pick a repayment plan first if you’re still parked there. Three consecutive returned payments cancel your enrollment and the discount with it, so don’t point it at an account that runs near zero. And if you’re in default, ED says to consolidate at StudentAid.gov and choose a repayment plan before you can enroll at all.
That June 2028 end date is the same whether you enroll today or on September 30, so every month you wait is a month of the lower rate you don’t get back. Set it up before your next payment is due.
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