Student loan news
you need now.
June 18, 2026 – The
Department of Education announces a two-year 1% interest rate reduction for eligible student
loan borrowers who enroll in auto pay by Sept. 30.
Through June 2028, borrowers who have their monthly
payments automatically drawn from their bank accounts will get an extra benefit – an additional
0.75% off their interest rate on top of the existing 0.25% autopay discount. This
applies to Federal Direct Loans originated after July 1, 2012.
Here’s what to know:
- • If you’re already enrolled in auto pay, you’ll get the extra
discount automatically.
- • Auto pay discounts lower the interest owed on your loan(s), but may
not lower your monthly payment amount, so you should check with your loan servicer for the
specific terms of your discount.
- • In many cases, more of each payment goes toward principal, helping
you pay off your balance faster. Also, if your payment is income-based, the monthly amount won’t
change, though there may be potential tax benefits.
- • Borrowers who have defaulted on their loans or who have yet to
switch from the now-defunct SAVE repayment plan will have extra steps before
qualifying.
Here are the details.
March 9, 2026 – The SAVE student loan plan has officially been terminated.
The Education Department’s settlement of a 2024 lawsuit is approved by a federal appeals court, officially ending the income-driven SAVE repayment plan and requiring approximately 7 million enrolled borrowers to move into a different repayment program. In December, the Education Department said the settlement means that:
Today, borrowers can choose between fixed payment plans (such as a standard 10-year plan), or a handful of existing income-driven repayment plans. And starting in July 2026, borrowers will have access to two new plans created by the One Big Beautiful Bill Act: a new standard plan offering a fixed monthly payment for terms ranging from 10 to 25 years (depending on your total loan amount) and a new income-driven plan (the Repayment Assistance Plan) where your monthly payment is based on a percentage (1 to 10%) of your adjusted gross income.
And a reminder: if you’re an existing SAVE loan borrower, interest has been accruing on your loan since August 2025.
July 4, 2025 – The President signed the One Big Beautiful Bill Act into law. Here’s what it means for student loans.
The bill scales back federal student loans in several ways over the coming years, including by:
• Ending Grad PLUS loans and capping Parent Plus loans beginning next year. This puts a limit on how much graduate students and parents are able to borrow, rather than allowing them to borrow up to the full cost of attendance.
• Phasing out a number of current income-driven repayment plans over the next three years, including the newest SAVE plan, in favor of a new Repayment Assistance Plan aimed at simplifying the choices. RAP will require even the lowest-income borrowers to pay at least $10 a month and requires 30 years of payments — rather than 20 or 25 — before any remaining balance can be forgiven. Parent borrowers won’t be eligible.
• Making it harder to get loan payments waived or deferred. For people who get loans on July 1, 2027 or after, there will be no forbearance or deferment based on economic hardship or unemployment.
More than ever, it’s important to stay informed about your options, especially as delinquency
rates rise.
