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Student Loan Autopay Discount Is Now 1%: Enroll by Sept. 30, 2026

Federal Direct Loans · Rules checked · Runs in your browser; nothing you type is sent anywhere

On July 1, 2026, the U.S. Department of Education raised the auto pay interest rate reduction on federal Direct Loans from 0.25 percentage point to 1 point. Borrowers who were already enrolled, or who enroll by 11:59 p.m. Eastern time on September 30, 2026, keep the larger reduction through June 30, 2028. This calculator shows what that is worth on your balance, compared with no auto pay and with the old 0.25-point reduction.

Your loan

Are you enrolled in auto pay now?
If you are already enrolled, the 1-point reduction started on July 1, 2026 with no action needed.
From your servicer's account page. Use the principal, not the payoff amount.
If your loans have different rates, use the average weighted by balance, or run each loan.
What you pay each month. $30,000 at 6.53% repaid over 10 years is $341.11 a month.

What the Department of Education says

  • Starting July 1, 2026, the reduction for borrowers enrolled in auto pay went from 0.25% to 1%. It is available for Direct Loans disbursed on or after July 1, 2012.
  • If you are already enrolled, you do not need to do anything or contact your servicer.
  • You keep the larger reduction through June 30, 2028, as long as you stay in auto pay and keep repaying. Moving to a forbearance or deferment, or cancelling auto pay, stops it.
  • To get it, enroll by 11:59 p.m. Eastern time on September 30, 2026. You sign up with your loan servicer; Federal Student Aid names Aidvantage, CRI, Edfinancial, MOHELA and Nelnet.
  • To see which servicer has your loans, log in at studentaid.gov and look under My Aid for the loan servicer details. Federal Student Aid also warns never to pay an outside company for help with your federal student loans; your servicer helps for free.

What the announcement does not say

We found no statement of the reduction that applies after June 30, 2028, or of what a borrower who enrolls after September 30, 2026 receives. The calculator therefore stops at June 30, 2028 and shows the old 0.25-point reduction only as a comparison. If the Department publishes either rule, we will add it and note the change here.

If you are on the Repayment Assistance Plan

Under RAP, interest that your on-time payment does not cover is not charged to your account (34 CFR 685.209(h)(4)(i)). If your RAP payment is smaller than a month of interest, a lower rate mostly reduces the interest the government absorbs, and your payment does not change. The calculator shows a note when your payment is below about one month of interest.

What the tool assumes

  • One loan, or several loans at one rate. The rate you enter is the rate before any auto pay reduction.
  • The reduced rate applies from July 1, 2026 if you are already enrolled, or from the date you enter.
  • Interest is simple daily interest: principal times the rate divided by 365.25, times the days since the last payment, the method Federal Student Aid describes.
  • The same payment each month in all three rows, on the same day of the month as the start date (the 28th at the latest), starting the month after. Payments go to interest first, then principal. Unpaid interest is not added to principal.
  • No forbearance, deferment, missed payment or change of plan inside the window.
  • Nothing after June 30, 2028.

Parameters used, with sources

Loaded from the same file the calculation reads.

Test cases

Each case was computed independently by a reference implementation and by this page's code; the two must agree before publication. The self-test reruns that comparison in your browser for all three scenarios.

Sources

Corrections

If a rule or a figure is wrong, tell us. We fix it, update the checked date, and note the change here.

Dollars Ahead is not affiliated with the U.S. Department of Education, Federal Student Aid or any loan servicer. This tool shows what published rules do to the numbers you enter. It is not financial or legal advice, and it does not know your loans. Your servicer's statement is the final word on your rate and balance.