Federal student loan borrowers now have until the end of the year to enroll in automatic payments and receive a temporary 1% interest-rate reduction through June 30, 2028. The Department of Education increased the standard autopay discount from 0.25% to 1% for eligible federal loans in repayment. After June 30, 2028, the discount is scheduled to revert to 0.25%. On a $10,000 loan at 7% repaid over 15 years, monthly payments would be $89.88 without a discount, $88.49 with the standard discount and $84.39 with the temporary 1% discount. The initiative is intended to reduce interest costs as borrowers face continued financial pressure, with August annual inflation at 3.4% and core inflation at 2.4%, both above the Federal Reserve’s 2% target. Automatic payments can also help borrowers avoid missed due dates, which may support their FICO scores, although borrowers must ensure their bank accounts can cover withdrawals. Existing eligibility rules cover qualifying Direct Loans disbursed on or after July 1, 2012; older Direct Loans, private loans and commercial FFEL loans are excluded. Borrowers in default or still enrolled in the discontinued SAVE plan must move into an eligible repayment status or plan before enrolling.