The U.S. Department of Education announced that student loan borrowers who enroll in automatic payments will receive a temporary boost in their interest rate discount starting July 1.

The discount will increase from 0.25 percentage points to 1 percentage point, lasting for two years from 2026 to 2028, reducing costs for borrowers who opt in.

Officials said the change is intended to encourage more people to use auto pay after participation dropped significantly following the COVID repayment pause.

Borrowers already enrolled will automatically receive the benefit, and new participants have until September 30 to qualify, NPR has reported.

The policy is part of broader upcoming changes to federal student aid, including new repayment plans and loan limits.