Student Loan Borrowers Will Get Interest Rate Cut If They Sign Up For Auto Pay (npr.org)
- Reference: 0184002004
- News link: https://news.slashdot.org/story/26/06/19/232209/student-loan-borrowers-will-get-interest-rate-cut-if-they-sign-up-for-auto-pay
- Source link: https://www.npr.org/2026/06/18/nx-s1-5863085/student-loan-auto-pay-discount
> Student loan borrowers who enroll in automatic payments will get a much bigger discount on interest starting July 1, the U.S. Department of Education says. Auto pay has long offered a modest discount off borrowers' interest rate -- .25 percentage points -- but after millions of borrowers opted out during the long COVID repayment pause, with some making no payments for years, the nation's student debt portfolio swelled to $1.7 trillion. On Thursday, the department [1]said it will [2]temporarily increase its auto pay interest rate discount to one full percentage point . Practically, that means an undergraduate borrower with a loan at the current 6.39% would see their interest rate drop temporarily to 5.39%. The rate cut will last for two years, from July 1, 2026 through June 30, 2028. Borrowers already enrolled in auto pay do not need to act. They will automatically receive the rate cut. [...] The department says borrowers will have until Sept. 30 to sign up for auto pay and qualify for the two-year interest discount.
[1] https://www.ed.gov/about/news/press-release/us-department-of-education-announces-student-loan-interest-rate-reduction
[2] https://www.npr.org/2026/06/18/nx-s1-5863085/student-loan-auto-pay-discount
Re: (Score:1)
and die for Bibi
Re: (Score:2)
100% accurate. Today the strait is closed again because Israel won’t stop attacking Lebanon.
Gulf War 3.0 baby!
Re: (Score:2)
It might be an option, but should not expect everyone to take that "bargain". Moreover, with the reliance on stop-loss in recent times, four years is hardly a guarantee.
Re: (Score:2)
Exactamente. I had friends that got stop-lossed for Iraq. Even if I were morally bankrupt enough to sign up for a four year stint potentially murdering people so that oil companies or Halliburton can make more profit, I wouldn't be dumb enough to believe they wouldn't keep me for longer.
Re: (Score:2)
That's socialism.
Auto-pay is evil (Score:2)
lets the other side control when to turn it off. If they flake or go rogue, you are left holding the bag.
Government in charge of X makes X political (Score:1)
and subject to considerations and incentives of politicians rather than X mission success and success alone.
If a private actor were to lead with their own subjective considerations rather than mission success, they would either make it work or they'd fail entirely on the merits and demerits of their judgements.
If a government actor leads with politics and falls flat, you and I pay for it and if the politician gets reelected in a landslide for giving away our taxes to his or her constituents...well then, who
Lower rates (Score:2)
You get a lower rate but the money is coming out faster. No skipping a payment. Also this is only going to work for federal loans not other school loans.
Good idea... but (Score:3)
We really should abandon the Student Loan idea.
1) It is not reasonable to expect people that by definition have NOT had a college education to make good decisions about student loans. Some of their parents may have collage degrees, but not all.
2) They are long term loans that cannot be refinanced. If interest rates rise, the borrowers make out like a bandit. But if they fall, they get screwed.
3) Scholarships are better ideas.
Why scholarships are better:
You can quite easily pick the person who really needs it and/OR the person that most benefits from it.
You can get much stricter on which education institutions qualify for them. This will end a bunch of scams, such as the schools that if graduate from get a $60,000 per year job but cost $900,000 to go to.
You can put in grade requirements for continuing them for next year.
Scholarships fight educational inflation, while loans encourage it. If schools know the main government scholarships only pay Y on average, they will have immense pressure to keep their costs below Y. The government can easily set the values of the scholarships to discourage inflation because they do not want to pay more.
But banks will always be willing to increase the amount they loan to the students. To them, the cost of education is a GOOD thing because larger loans means larger profits.
Re: (Score:2)
"They are long term loans that cannot be refinanced."
I refinanced mine multiple times.
It's a trap (Score:2)
You have to consolidate your loans into private loans to do this and as soon as you do that you lose all the protections that come from having public loans. You will then have your wages immediately garnished by the private company that owns your loans
Trump is a crook and everyone knows it. Every single thing he does has to be scrutinized for the angle. Meanwhile they just retired Air Force One and replaced it with a foreign made plane that is probably stuffed full of listening devices. It was also a 1
Working as a collections agent for the lenders (Score:2)
This is nothing but an effort by the lenders to ensure repayment/income to their portfolios -- does absolutely nothing for those out there struggling. The student loan "system" is a corrupt series of companies, regulations and laws that no other agency would get away with. The entire system needs to be deleted.
Force schools to back and pay off useless degrees (Score:2)
*-studies, *-history and philosophy degrees should not qualify for a taxpayer backed student loan.
If schools want to offer these degrees let them use their own money for the loan.
Cool Cool (Score:3)
Sounds like a good plan.
Can we talk about the fact that these loans are at 6.39% when the 30 Yr. bond rate is only 4.9% and the 10 year is 4.45%?
Re:Cool Cool (Score:5, Insightful)
> Can we talk about the fact that these loans are at 6.39% when the 30 Yr. bond rate is only 4.9% and the 10 year is 4.45%?
Sure, let's. Student loans have a higher-than-market rate because there is increased risk to the lenders. The lender can't repossess a college degree to make themselves whole.
That said, I think the real discussion is why students need to go into debt in the first place. Many other countries besides the USA have lower tuitions and lower per-student debts. Why? Government support for education.
Re: (Score:2, Interesting)
> Student loans have a higher-than-market rate because there is increased risk to the lenders.
There's increased risk from this loan you can only discharge through death, or through a program that people are getting cheated out of eligibility for that pays back the lender? Could you draw us a flowchart showing how you came to that conclusion?
Re: (Score:1)
> Show me the flow chart how your panties got into such a bunch on a Saturday
Well, friend, it involves a student loan that I was promised I had a ~3% rate locked in on which is currently only not accruing over 6% because of SAVE which the rapeublicans want to destroy.
Re: (Score:3)
Trump could waive student debt and the republicans would stand up with tears in the eyes yelling bravo sir! Biden tried it and was immediately stopped by the courts.
Re:Cool Cool (Score:4, Informative)
No. Federal loans are not readily dispatchable, are supposed to be an investment in the future of the country, and still Congress sets the rate stupidly high.
Re: (Score:3)
> The lender can't repossess a college degree to make themselves whole.
No but if the borrower can't get a good job there should be cause of action for Warranty Act claims against the college.
Extremely few people go to college with the expectation of borrowing to be unemployable.
Re: (Score:2)
> "No but if the borrower can't get a good job there should be cause of action for Warranty Act claims against the college. Extremely few people go to college with the expectation of borrowing to be unemployable. "
THIS
The colleges/universities should be held at least partially financially responsible for loan-enrolling so many people who probably are not ready or suitable for college (or at least THAT college) and are destined to either pick a useless major, or drop out. The colleges currently have ZERO
Re: Cool Cool (Score:2)
Mass debt is profitable to the ones pulling the strings of our government.
Re: (Score:2)
> "Mass debt is profitable to the ones pulling the strings of our government."
Actually, it is much more profitable for the colleges/universities that rake in tons of zero risk money and have zero accountability for their admitting and spending/charging behavior.
Re: (Score:1)
Send all your students to study for free in ItsNotReal, as your country pays for their free-to-access education system.
Re: (Score:2)
Farm loans are like 5% now. What needs to be done is make these dischargeable debt. This will make lending focused on degree payback and the college graduation rate. Colleges will be forced to make their programs more affordable and entire areas of study with no practicable job applications will dry up. HBCUs will be forced to address their graduation rates.