The offer
- Before July 1, 2026, auto pay cut your interest rate by 0.25 percentage points.
- From July 1, 2026, the Department added 0.75 points, for a total of 1 point.
- Enroll by Dec. 31, 2026 (the original Sept. 30 deadline was extended on Sept. 29, 2026), or already be enrolled, and the reduction lasts through June 30, 2028.
- You must stay in auto pay to keep it.
- It applies to Direct Loans that originated after July 1, 2012, including parent loans.
How to enroll
Log in to your loan servicer’s website and choose auto pay. Borrowers already enrolled got the extra reduction automatically.
Borrowers in default
They have to consolidate eligible loans and apply for a repayment plan first.
Why on-time matters on RAP
RAP’s interest waiver and principal match only apply in months you pay on time and in full. Auto pay is one way to make sure of that.
In the calculator
Enter the interest rate you actually pay. If you have the 1-point reduction, subtract it from your loan’s rate for the years it applies.
Not financial or legal advice. This page explains the published rules. It does not tell you which plan to choose. Your loan servicer and StudentAid.gov have the final word on your account.
Official sources
- U.S. Department of Education press release, June 18, 2026: auto pay interest rate reduction
- U.S. Department of Education press release, Sept. 29, 2026: enrollment period extended
- StudentAid.gov: SAVE Plan Borrowers – FAQs About Choosing a Different Repayment Plan (October 2026)
Last verified Oct 17, 2026. Corrections are logged on What changed.
Next guide: FFEL and Perkins loans: getting into RAP means consolidating