WASHINGTON — The U.S. Department of Education has extended the enrollment period for the 1% interest rate reduction benefit by an additional three months. 

Borrowers who enroll in auto pay by Dec. 31, 2026, or those who are already enrolled, will receive the interest rate reduction through June 30, 2028. The additional interest rate reduction will benefit all borrowers whose Federal Direct Loans originated after July 1, 2012, the department said.

All borrowers who were previously enrolled in auto pay when the extension was first announced have had their interest rate automatically adjusted to 1%.

Since the interest rate reduction was announced earlier this year, nearly two million borrowers have enrolled in autopay. According to the education department, the temporary benefit is "designed to support borrowers, including those returning to repayment, while ensuring they can access key benefits under the new Repayment Assistance Plan (RAP) that requires on-time payments."

Borrowers who are not currently enrolled in auto pay must log in to their student loan servicer account and select “auto pay” from the navigation menu. Borrowers must enter their bank account information and confirm specific payment amounts, the department added. 

The department says that borrowers who are in default – and thus are not currently in repayment – must log in to StudentAid.gov, consolidate their eligible loans and then apply for a new repayment plan before enrolling in auto pay. Borrowers must remain in auto pay and meet all eligibility criteria while enrolled in auto pay to continue to benefit from the interest rate reduction.