Act now: Critical deadline for student loan borrowers fast approaching

NewsMillions of student loan borrowers could qualify for a larger interest-rate discount, but a key deadline is almost here.Canva stock imageBy Dallas Gagnon | MassLive.comFederal student loan borrowers seeking to lower their borrowing costs have less than two weeks left to qualify for a temporary interest-rate reduction offered by the U.S. Department of Education. Borrowers who enroll in automatic payments, or autopay, by Sept. 30, 2026, can receive a 1% reduction in their student loan interest rate through June 30, 2028. Currently, borrowers enrolled in autopay receive a 0.25% interest-rate reduction, meaning the temporary incentive increases that benefit fourfold.“This new initiative further complements the Trump administration’s efforts to make higher education more affordable and simplify student loan repayment,” the Department of Education said in a statement. Why SAVE Plan borrowers should pay attention to the Sept. 30 autopay deadlineThe interest-rate reduction comes on the heels of a sweeping overhaul of the federal student loan system under the Trump administration’s One Big Beautiful Bill Act. Among the changes was the termination of the SAVE Plan, or Saving on a Valuable Education Plan, which was an income-based repayment option that also stopped monthly interest from accruing on loans. Now that the SAVE Plan has ended, about 7.5 million student loan borrowers enrolled in the program will have to choose a new plan, and their student loans will start accruing interest.The Department of Education announced the SAVE Plan’s termination in March 2026, calling the plan “unlawful.” The Department began issuing notices to student loan borrowers on July 1, instructing them “to exit the illegal SAVE Plan and enroll in a legal repayment plan within 90 days.”In response, the Trump administration launched two new plans — a Tiered Standard Plan and an income-driven Repayment Assistance Plan (RAP). Borrowers who enroll in autopay for any of their repayment plans can receive the 1% interest rate reduction. “The Trump Administration is making student loan repayment easier than ever, and borrowers should not wait to take advantage of this temporary interest rate reduction to stay on track for key student loan benefits,” Under Secretary of Education Nicholas Kent said in a statement.“This interest rate reduction will help borrowers as they consider new, affordable repayment plans and work to repay their loans on time.” How to enroll in autopay Federal student loan borrowers who enroll in autopay by Sept. 30, 2026, can qualify for a temporary 1% interest-rate reduction through June 30, 2028. Borrowers already enrolled in autopay do not need to take any action.To enroll in student loan autopay:Log in to your federal student loan servicer account.Select the autopay or automatic payments option.Enter your checking or savings account information.Authorize automatic monthly student loan payments.Complete enrollment by Sept. 30, 2026, to qualify for the temporary 1% interest-rate reduction.Remain enrolled in autopay to continue receiving the interest-rate discount.What SAVE Plan borrowers need to knowLoan servicers began sending SAVE transition notices July 1.Borrowers generally have 90 days after receiving notice to choose a new repayment plan.Former SAVE borrowers can choose from the Repayment Assistance Plan (RAP), Income-Based Repayment (IBR), the Standard Repayment Plan or the Tiered Standard Plan.Borrowers who do not select a repayment plan within the deadline can be automatically assigned to another repayment option.Borrowers who want the 1% interest-rate reduction must enroll in autopay by Sept. 30, 2026.Who qualifies for the 1% student loan interest-rate reduction?Borrowers already enrolled in autopay.Borrowers who enroll in autopay by Sept. 30, 2026.Borrowers with eligible Federal Direct Loans originated after July 1, 2012.Borrowers enrolled in RAP, IBR, Standard Repayment or Tiered Standard repayment plans.Former SAVE Plan borrowers who transition into a new repayment plan and enroll in autopay before the deadline.Dave & Busters is struggling: But will locations close? Buc-ee’s opens even more locations this year and beyondWhen is the fall equinox 2026?Dallas Gagnon is a Business Trending Reporter and a Reporting Fellow with the Newhouse School of Communications. Dallas covers everything from business openings and closures, national business news, layoff...