Education Department extends deadline for student loan interest rate discount

The Trump administration announced on Tuesday that it will extend the deadline for federal student loan borrowers to get a reduction of 1 percentage point on their interest rate.

Nearly 2 million federal student loan borrowers have signed up for autopay since the discount became available over the summer, the department said.

Typically, borrowers on autopay have had access to a 0.25 percentage point discount.

More than 42 million Americans carry student loans, and the outstanding debt exceeds $1.7 trillion. The current average interest rate on federal student loans is 6.54%, according to higher education expert Mark Kantrowitz.

To qualify for the interest rate discount, your debt must be from the Direct Loan program, Kantrowitz said. That includes Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans and Direct Consolidation Loans. Parent PLUS borrowers will also be eligible, as long as their loans are from the Direct Loan program, he said.

Federal Family Education Loans, or FFEL, aren't eligible for the temporary reduced rate. As the federal government is offering the discount, the benefit does not extend to private student loans.

In addition, your loans must have been disbursed on or after July 1, 2012, Kantrowitz said. You can find your loan disbursement dates at Studentaid.gov or with your servicer. Your loans must also be in good standing to qualify.