US veteran dubbed highway ‘angel’ for using combat first aid to save crash survivor
Veteran James Brown saves fellow truck driver, honored as 'angel' of highways
The Guardian World1 min read
Businessneutral
Student loan borrowers will get an interest rate cut if they sign up for auto pay
TL;DR
Student loan borrowers can receive a 1% interest rate cut for two years by signing up for auto pay, starting July 1. This is an increase from the previous 0.25% discount.
Key points
- Student loan borrowers can get a 1% interest rate cut
- Discount applies for two years starting July 1
- Previous auto pay discount was 0.25%
Student loan borrowers who sign up for, or already use, auto pay will get a 1 percentage point discount on interest for two years, starting July 1. Daniel de la Hoz/Moment RF via Getty Images
Daniel de la Hoz/Moment RF via Getty Images
Student loan borrowers who enroll in automatic payments will get a much bigger discount on interest starting July 1, the U.S. Department of Education says.
Auto pay has long offered a modest discount off borrowers' interest rate — .25 percentage points — but after millions of borrowers opted out during the long COVID repayment pause, with some making no payments for years, the nation's student debt portfolio swelled to $1.7 trillion.
On Thursday, the department said it will temporarily increase its auto pay interest rate discount to one full percentage point. Practically, that means an undergraduate borrower with a loan at the current 6.39% would see their interest rate drop temporarily to 5.39%.
Education
Big changes coming to student loans on July 1
The rate cut will last for two years, from July 1, 2026 through June 30, 2028.
Borrowers already enrolled in auto pay do not need to act. They will automatically receive the rate cut.
In a call with reporters on Thursday, Undersecretary Nicholas Kent said that, back in 2019, roughly 83% of borrowers were enrolled in auto pay but that by late 2025, that participation rate had dropped considerably, to just 40% of borrowers.
Q&A
How much will student loan borrowers save with auto pay starting July 1?
Borrowers will save 1 percentage point on their interest rate for two years if they sign up for auto pay.
What was the previous interest rate discount for auto pay before the increase?
The previous discount for auto pay was 0.25 percentage points.
Why did the U.S. Department of Education increase the auto pay discount?
The increase aims to encourage borrowers to enroll in auto pay after many opted out during the COVID repayment pause, contributing to a $1.7 trillion student debt portfolio.
