FederalLoans News & Analysis
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Education Department Extends Student Loan Interest Rate Discount Deadline
The U.S. Education Department has extended the deadline for federal student loan borrowers to secure a 1 percentage point reduction in their interest rates until December 31, 2025. This extension allows nearly 2 million borrowers who signed up for autopay since the discount's launch to benefit from the reduced rates lasting until June 30, 2028. As of now, the average interest rate on federal student loans stands at 6.54%. This extension is important for over 42 million Americans holding $1.7 trillion in student debt, providing an opportunity for potential savings on interest costs.
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Federal Student Loans Offer 1% Rate Discount Through 2028
The U.S. Department of Education announced a 1 percentage point reduction on federal student loan interest rates for borrowers who enroll in autopay. This discount is available until June 30, 2028, and currently complements the existing 0.25 percentage point discount for autopay. Eligibility includes borrowers with Direct Loans issued after July 1, 2012, and those whose loans are in good standing. With over 40 million Americans holding student loans, this measure may alleviate financial pressures during rising living costs.
Read More: Federal Student Loans Offer 1% Rate Discount Through 2028