Consumer Alert: Federal Student Loan Borrowers Should Act Now to Enroll in Autopay for 1% Interest Rate Deduction
HARRISBURG – Attorney General Dave Sunday is reminding federal student loan borrowers that Wednesday, September 30 — this Wednesday — is the deadline to enroll in autopay to receive a one percent interest rate deduction on eligible federal student loans.
Borrowers who enroll in autopay in time will retain the one-percent interest deduction through June 30, 2028. The deduction applies to direct loans disbursed on or after July 1, 2012, including parent and graduate borrowers.
“Student loan borrowers should take advantage of every opportunity to reduce the cost of their loans,” Attorney General Sunday said. “Borrowers who are eligible for the one percent interest rate deduction should make sure they enroll now, and continue monitoring their accounts to ensure their payments and interest rate are being applied correctly.”
Borrowers can enroll in autopay through their federal student loan servicer’s website. If a borrower has already enrolled in autopay, they do not need to re-enroll. The interest rate deduction will automatically be applied to the account.
A lower interest rate means more of a borrower’s monthly payment can be applied to the loan principal rather than interest, which may help borrowers pay down their loan balance faster.
Even when enrolled in autopay, borrowers should continue monitoring their student loan accounts regularly to ensure that their servicer applies the interest rate deduction correctly, auto-debits the correct amount on a monthly basis, and debits payments on time.
Borrowers who do not know their loan servicers or need to change their monthly payment amount can log into their account at StudentAid.gov to review information about their loan servicer and repayment plan.
If borrowers encounter problems with the application of the interest rate deduction or autopay, borrowers may file a complaint with the Pennsylvania Office of Attorney General, Bureau of Consumer Protection.
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