U.S. Offers 1 Percent Autopay Discount on Some Federal Student Loans Through 2028 at Estimated $6 Billion Cost

U.S. 25 percent discount. The change applies to loans originated on or after July 2012.

Borrowers already enrolled in autopay will receive the new discount automatically. The 1 percent autopay discount begins July 1 and ends June 30, 2028. Borrowers must enroll in autopay by September to receive the benefit.

Those in default must consolidate their loans and enter a new repayment plan before enrolling. 52 percent. 07 percent.

07 percent. Education Undersecretary Nicholas Kent stated the temporary discount is estimated to cost $6 billion. "This temporary incentive is designed to help borrowers pay down their balances more quickly, take full advantage of new repayment benefits, remain on track toward loan discharge opportunities, and to strengthen the overall health of the federal student loan portfolio," he told reporters.

Thirty-seven percent of the nearly 43 million Americans with federal student loans are currently paying down their debt. Approximately 9 million borrowers are in default and 3 million are delinquent. Nearly 7 million borrowers remain enrolled in the defunct Saving on a Valuable Education plan.

Approximately 400,000 borrowers have switched from the SAVE plan to other repayment plans. A new income-driven repayment plan called the Repayment Assistance Plan will be available starting July 1. Under that plan, monthly payments range from 1 percent to 10 percent of a borrower’s income, and any remaining balance is forgiven after 30 years of qualifying payments.

A new standard repayment plan will allow repayment terms from 10 years up to 25 years, with longer terms for larger debts.