Student Loan Borrowers: Apply for Interest Rate Reduction By December 31

The Department of Education has announced that qualifying student loan borrowers will now have until year-end to apply for a temporary 1% interest rate reduction on their student loans. Qualifying borrowers who enroll in automatic payments will receive a 1% interest rate deduction through June 30, 2028. The temporary interest rate applies only to borrowers with eligible federal direct loans that originated after July 1, 2012. This includes both student and Parent PLUS borrowers. Borrowers who are in default must first bring their accounts into good standing before they can qualify for the rate reduction (by consolidating eligible loans and enrolling in a repayment plan). FFEL and private student loans do not qualify for the rate reduction. To take advantage of the reduction, borrowers must sign up for autopay by 11:59pm on December 31 by logging into their student loan account and providing their bank account information. For more information on the deductibility of expenses related to higher education, visit Tax Facts Online. Read More: Link to Q8054.