U.S. Secretary of Education Linda McMahon speaks at a press conference at the White House on November 20, 2025 in Washington, DC, USA.
Evelyn HochsteinReuter
The Trump administration announced Tuesday that it is extending the deadline for federal student loan borrowers to have their interest rates reduced by 1 percentage point.
Earlier, the U.S. Department of Education said borrowers had until the end of Wednesday to enroll in automatic payments and take advantage of the interest rate reduction. Federal student loan holders currently have a forbearance until December 31st.
Once a borrower enrolls, the benefit lasts until June 30, 2028.
The department said nearly 2 million federal student loan borrowers have enrolled in AutoPay since the discount became available in the summer.
Autopay borrowers typically receive a discount of 0.25 percentage points.
More than 42 million Americans have student loans, totaling more than $1.7 trillion in debt. According to higher education expert Mark Kantrowitz, the current average interest rate on federal student loans is 6.54%.
Most federal student loans qualify
To qualify for the interest rate discount, the debt must come from a direct loan program, Kantrowitz said. This includes Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidated Loans. He said Parent PLUS borrowers are also eligible as long as the loan is from the Direct Loan Program.
Federal Family Education Loans (FFEL) are not eligible for temporary interest rate reductions. This benefit does not apply to private student loans because the federal government provides the discount.
Additionally, your loan must have been disbursed after July 1, 2012, Kantrowitz said. You can check your loan disbursement date on Studentaid.gov or by contacting your servicer. Your loan must also be in good standing to qualify.
How to register for Autopay
Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers, said student loan borrowers can sign up for automatic payments through their loan servicer’s website. He told me to look for a tab labeled “Manage Payments” or something similar.
Submitting a request is easy, although you typically have to enter your bank account number and a few other details. “It takes a minute,” Buchanan said.
If you don’t know which company administers your student loans on behalf of the Department of Education, or if you would like contact information for the company, you can find information at StudentAid.gov.
