Federal student loan autopay takes a full percentage point off your rate through June 30, 2028, if you’re enrolled by December 31, 2026, and your loans are Direct Loans made after July 1, 2012. Turn it on with your loan servicer, then keep it on, since a payment pause or bounced payments can stop the discount.
A full point off your rate saves 1% of what you owe in interest each year. By our math, that’s about $100 a year for every $10,000 you owe, a bit less as you pay the balance down.
Until July 1, 2026, autopay took a quarter of a percentage point off federal student loan rates. That day, the Department of Education (ED) raised the cut to a full point on Direct Loans made after July 1, 2012, parent loans included. Borrowers already on autopay got the bigger cut automatically. ED first gave everyone else until September 30, 2026, to enroll, then on September 29 pushed the deadline to December 31, 2026.
Enroll by then, and the full point lasts through June 30, 2028, but ED says you keep it only while you stay in autopay.
Turn it on with your loan servicer, not on StudentAid.gov. If you don’t know your servicer, your StudentAid.gov dashboard names it under My Aid. Log in to the servicer’s site, choose auto pay, enter your bank account details, and confirm the payment amount. If you’re still on the now-defunct SAVE repayment plan, move to another plan first. If you’re in default, ED says to consolidate your loans into a new one and pick a repayment plan before you enroll.
Then keep it running. The discount stops during deferment and forbearance, the federal options for pausing payments, and comes back when regular payments restart. Three payments bounced for insufficient funds can cancel your enrollment, so link autopay to an account that never runs low.
Check your next statement for the lower rate. And if you switch banks, move autopay to the new account before you close the old one.
Editorial & Advertiser Disclosure: The editorial content on this page is not provided, commissioned, reviewed, approved, or otherwise endorsed by any advertiser. Opinions expressed here are ours alone, not those of any advertiser. The offers that appear on this site are from companies that compensate us. That compensation may influence which products we cover and where and how they appear on a page – including the order in which they appear – but it does not influence our evaluations, ratings, or opinions. We do not include every company or offer available in the marketplace.
Related:
