politics
Education Department Offers 1% Rate Cut on Some Student Loans Only to Auto-Pay Borrowers
The temporary reduction applies to Direct Loans issued after July 1, 2012, and runs from July 1 through June 30, 2028. Borrowers must enroll in automatic payments and, in some cases, consolidate loans to qualify.
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U.S. Department of Education announced a temporary 1% reduction in interest rates for certain federal student loans on Thursday. The reduction applies only to federal Direct Loans issued after July 1, 2012.
Borrowers must be enrolled in automatic payments or sign up for them to receive the lower rate. Those who consolidate loans must also return to good standing to qualify. The change begins July 1 and lasts through June 30, 2028.
75% for them. Forty percent of federal student-loan borrowers are currently enrolled in auto pay. Nearly 9 million borrowers are in default, defined as missing nine months of payments.
7 trillion. ” The Education Department said enrollment in auto pay can also help borrowers maintain eligibility for its repayment plans by reducing missed payments. The announcement comes as the department phases out prior repayment options and offers its own income-driven plans.
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