Student Loans: Deadline to Secure Lower Interest Rates Hits in Just Days
Summary
The U.S. Department of Education is offering a temporary 1% interest rate reduction on federal student loans for borrowers who sign up for automatic payments by September 30. This reduction will last until June 30, 2028, helping borrowers save money and encouraging timely payments.Key Facts
- Borrowers must enroll in automatic payments by September 30 to qualify for the interest rate reduction.
- The 1% lower interest rate applies to federal student loans made after July 1, 2012.
- The reduction lasts until June 30, 2028.
- This program aims to help borrowers save money and reduce missed payments.
- A borrower with $50,000 debt and an interest rate of 7.94% could save about $23 per month.
- The program may benefit those with large loan balances, such as graduate students or Parent PLUS loan borrowers.
- Sign-up requires authorizing automatic payments from a checking or savings account.
- Automatic payments help avoid missed payments, but do not solve difficulties if borrowers cannot afford payments.
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