Federal student loans have a new interest rate discount — here's who qualifies

Law Ho Ming | Moment | Getty Images The Trump administration is offering federal student loan borrowers a deeper-than-usual discount on their interest rates if they sign up for automatic payments soon — but not everyone will qualify. In a June 18 press release, the U.S. Department of Education announced that eligible borrowers who enroll in autopay will benefit from a 1 percentage point reduction on their interest rate. The temporary relief will last through June 30, 2028. Borrowers on autopay currently have access to a 0.25 percentage point discount. More than 40 million Americans hold student loans, and the discount could lower their monthly payments at a time when many are struggling with the rising cost of living . Currently, the average interest rate on federal student loans is 6.54%, according to higher education expert Mark Kantrowitz.