{"id":831,"date":"2026-06-18T21:46:07","date_gmt":"2026-06-18T21:46:07","guid":{"rendered":"https:\/\/coasttocoastmoverss.com\/?p=831"},"modified":"2026-06-18T21:46:07","modified_gmt":"2026-06-18T21:46:07","slug":"government-cuts-student-loan-interest-by-1-if-borrowers-use-auto-pay","status":"publish","type":"post","link":"https:\/\/coasttocoastmoverss.com\/?p=831","title":{"rendered":"Government Cuts Student Loan Interest By 1% If Borrowers Use Auto-Pay"},"content":{"rendered":"
\n

Who Is Eligible For The New 1% Interest Cut?<\/h2>\n

Those who already use auto-pay don\u2019t have to do anything to get the additional deduction, which will apply automatically as long as they remain using auto-pay. The auto-pay benefit will apply broadly to borrowers in repayment with federal loans originating after July 1, 2012. That includes people who already use auto-pay and those who don\u2019t use it yet, but set it up before the end of September. Borrowers on the SAVE plan can enroll in auto-pay after they enroll in a new repayment plan starting July 1, and if borrowers are in default on their loans, they can consolidate their eligible loans and then apply for a new repayment plan. They can then enroll in auto-pay.<\/p>\n

Read more Severe Storms Trigger Over 6,000 Flight Delays\u2014These Airports Are Impacted<\/a><\/p>\n

Surprising Fact<\/h2>\n

While more than 80% of federal borrowers used to use auto-pay, that share has declined to 40% since the COVID-19 pandemic, the Education Department said Thursday.<\/p>\n

What Other Student Loan Changes Are Coming?<\/h2>\n

A slew of new changes<\/u> to federal student loans on July 1, most notably establishing the Repayment Assistance Plan (RAP), which replaces income-driven repayment plans. Under RAP, borrowers\u2019 monthly payments will still be calculated based on their income, but they will have to make payments for 30 years before the remaining loans are forgiven\u2014up from 20 or 25 years under previous plans. RAP will be the only income-based repayment option that borrowers have after July 1, but they can also use a standard repayment plan and pay back their loan at a fixed rate each month. The new plans will only be mandatory for new borrowers. Other changes to student loans under last year\u2019s spending bill include establishing new caps on federal student loans, adding new restrictions for Pell Grants, placing new limits on loans being in forbearance and getting rid of rules that allowed borrowers to defer payments due to unemployment or economic hardship. Separate from the changes through the spending bill, the Trump administration is also set to enact<\/u> new restrictions on the Public Service Loan Forgiveness program starting July 1, which will restrict loan forgiveness for borrowers working at nonprofits that don\u2019t align with the government\u2019s policy agenda.<\/p>\n

Key Background<\/h2>\n

Federal student loans, which impact more than 42 million borrowers nationwide, have become a key political issue over the years, as Democrats have pushed for programs that would erase student debt. The Biden administration took a number of incremental steps on student debt relief, but the sweeping forgiveness plan at the heart of its agenda was ultimately struck down by the Supreme Court after Republicans challenged it. The Trump administration has taken a much less charitable position on student loans, with Education Secretary Linda McMahon saying<\/u> last year, \u201cAmerican taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies.\u201d In addition to the changes passed through President Donald Trump\u2019s \u201cBig Beautiful Bill,\u201d the president also ordered the federal student loan portfolio to move<\/u> to the Small Business Administration, though most student loan activity, other than<\/u> defaulted loans, is still under the Education Department for now. The Trump administration also resumed debt collections<\/u> on defaulted student loans last year after they had been paused amid the COVID-19 pandemic, a move that was expected to impact millions of borrowers.<\/p>\n

Read more Michelle Obama Makes Apparent Jab At Trump Over \u2018Peace Prize\u2019<\/a><\/p>\n

<\/div>\n

Further Reading<\/h2>\n

U.S. Department of Education Announces Student Loan Interest Rate Reduction <\/u> (Department of Education)<\/p>\n

How Trump\u2019s Spending Bill Will Impact Your Student Loans\u2014As It Heads To President For Signature<\/u> (Forbes)<\/p>\n

3 Big Dates For Student Loans Are In Just Weeks As Reforms Take Effect<\/u> (Forbes)<\/p>\n

Education Department Updates Key Student Loan Guidance In Advance Of Huge July Changes<\/u> (Forbes)<\/p>\n

Read more SpaceX Stock Plunge Wipes Out $600 Billion After Cursor Deal Spooks Investors<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Borrowers only have until the end of September to ensure they get the benefit.<\/p>\n","protected":false},"author":1,"featured_media":830,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-831","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"\nGovernment Cuts Student Loan Interest By 1% If Borrowers Use Auto-Pay - Coast to Coast Movers<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coasttocoastmoverss.com\/?p=831\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Government Cuts Student Loan Interest By 1% If Borrowers Use Auto-Pay - Coast to Coast Movers\" \/>\n<meta property=\"og:description\" content=\"Borrowers only have until the end of September to ensure they get the benefit.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/coasttocoastmoverss.com\/?p=831\" \/>\n<meta property=\"og:site_name\" content=\"Coast to Coast Movers\" \/>\n<meta property=\"article:published_time\" content=\"2026-06-18T21:46:07+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=831#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=831\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/#\\\/schema\\\/person\\\/266a8d2ebdac9f8b4354d52dead7fa6b\"},\"headline\":\"Government Cuts Student Loan Interest By 1% If Borrowers Use Auto-Pay\",\"datePublished\":\"2026-06-18T21:46:07+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=831\"},\"wordCount\":648,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=831#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/wp-content\\\/uploads\\\/2026\\\/06\\\/47d60119b33d7c50068e9ef52e2a4e16.webp\",\"articleSection\":[\"Business\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=831#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=831\",\"url\":\"https:\\\/\\\/coasttocoastmoverss.com\\\/?p=831\",\"name\":\"Government Cuts Student Loan Interest By 1% If Borrowers Use Auto-Pay - 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