Federal student loan borrowers have two days left to enroll in automatic monthly payments and receive a temporary 1% interest rate cut under a Department of Education initiative that will ease rates through June of 2028.

Wednesday is the last day borrowers can sign up to receive the rate reduction by signing up for auto-pay, which automatically deducts payments from a borrower’s bank account on a set day each month.

Both student and parent borrowers can enroll in auto-pay to receive the discount, which will last until June 30, 2028, but they must have loans that originated after July 1, 2012.

Borrowers who already use auto-pay—and have been receiving a 0.25% interest rate cut—will automatically be signed up for the new 1% rate cut.

The new cut, which was announced over the summer, is one of a slew of changes to the federal student loan program included in the federal government’s “One Big Beautiful Bill” signed into law last year.

$600. That’s about how much a borrower with a standard $30,000 loan, and original 6.5% interest rate, will save over two years by getting a 1% interest rate reduction.

HOW TO SIGN UP FOR STUDENT LOAN INTEREST DISCOUNT

Borrowers can check their eligibility by logging into the federal student loan portal, either through studentaid.gov or through their loan servicer like Nelnet, MOHELA, Aidvantage or EdFinancial. For those whose loans were disbursed after July 1, 2012, enrolling in automatic payments before 11:59 p.m. on Wednesday, Sept. 30 will lock in the 1% rate reduction through June 2028.

Any borrower with a Direct Loan disbursed on or after July 1, 2012. Anyone with older direct loans, non-federal private student loans or commercial Federal Family Education Loans (FFEL) are not eligible. Those who have defaulted on their loans and are not in repayment, or are still on the defunct federal SAVE plan, can qualify but will have to apply for a new repayment plan before they can enroll.

The Trump administration dismantled the Biden-era Saving on a Valuable Education (SAVE) plan, rolling back accelerated forgiveness paths and ending lower income-driven payment calculations, and included a host of changes in its “One Big Beautiful Bill” spending plan. Starting July 1, 2026, the Education Department streamlined federal repayment into just two main pathways for new borrowers: a Standard Plan and the new Repayment Assistance Plan, which replaces income-driven repayment plans and forces borrowers to make payments for 30 years, up from 20 or 25 years under previous plans. Other changes to student loans include establishing new caps on federal student loans, adding new restrictions for Pell Grants, placing new limits on loans being in forbearance, eliminating the Grad PLUS loan program for new graduate borrowers and getting rid of rules that allowed borrowers to defer payments due to unemployment or economic hardship.