Federal student-loan borrowers serviced by MOHELA have until 11:59 p.m. Eastern on Dec. 31, 2026, to enroll in autopay and lock in the larger interest discount that runs through June 2028. The Education Department pushed back the original Sept. 30 cutoff, and MOHELA’s servicer pages now list the later date. From today, Oct. 21, borrowers who are not enrolled have 71 days.
How much the autopay discount grew on July 1
MOHELA says the interest-rate reduction for borrowers enrolled in autopay went from 0.25% to 1% on July 1, 2026. That is four times the earlier cut. The servicer calls the larger reduction a temporary benefit, available through June 30, 2028, so it covers two years of payments from the July increase.
A one-point cut is easy to underrate. On a $30,000 balance it trims about $300 of interest in the first year, before any payments shrink the balance. Because the reduction applies to the interest rate rather than to a single bill, it keeps working every month the borrower stays enrolled.
The enrollment cutoff is 11:59 p.m. ET on Dec. 31, 2026, which is 8:59 p.m. Pacific. The servicer states the time of day as well as the date. A borrower in California or Washington who waits for the last evening has three fewer hours than the date alone suggests.
The cutoff used to fall earlier. WAFB, reporting on the Education Department’s announcement, said the original deadline was 11:59 p.m. Eastern on Wednesday, Sept. 30, and that the department moved it to Dec. 31. The station reported that nearly two million borrowers had already enrolled and that officials said enrolling by year-end keeps the discount in place through mid-2028.
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What keeps the 1% in place once a borrower enrolls
Enrollment is free, according to MOHELA’s autopay page. Borrowers log in to their MOHELA online account, apply for autopay and accept the Auto Pay Authorization Agreement, which the servicer posts at mohela.studentaid.gov/AutoPayTerms. The monthly payment then comes out of a bank account the borrower names.
The discount lasts only while the borrower is actively in the program. MOHELA says the reduction remains in effect only while the borrower is actively participating in the autopay program. Leaving autopay, or being removed from it, ends the discount even if the dates above have not passed.
Removal can happen quickly. MOHELA says autopay comes off a loan, and the reduction goes with it, if three consecutive payments are returned for insufficient funds. The servicer adds that other conditions may apply. A borrower on a tight monthly budget has a practical reason to keep a cushion in the account the payment draws from.
Deferment and forbearance pause the benefit. MOHELA says autopay is not in effect during those periods and the borrower does not receive the interest-rate reduction. Both resume when the deferment or forbearance ends. Anyone planning to ask for a pause should expect the discount to stop for that stretch.
Borrowers get a payment reminder at least 21 days before each due date. Extra money is a separate step. MOHELA says it cannot add an additional withdrawal on a borrower’s behalf, so anyone who wants to pay more under Payments and Billing must choose Auto Pay, enter a Requested Auto Pay Amount for each loan, then select Preview and Submit. Extra amounts keep being withdrawn until the borrower changes them.
SAVE borrowers face two clocks at once
MOHELA says a court order ended the Saving on a Valuable Education Plan, known as SAVE, on March 10, 2026. The Education Department’s March 27 announcement put enrollment at more than 7.5 million borrowers and the plan’s estimated 10-year cost at $342 billion. It promised a transition window of at least 90 days.
Two replacement plans took effect July 1, 2026: the Repayment Assistance Plan, called RAP, and the Tiered Standard Plan. MOHELA says borrowers who got an email from Federal Student Aid can use the Repayment Calculator on StudentAid.gov, and that borrowers need not call the servicer. Anyone who recently filed an income-driven repayment application will be notified once it is processed.
Borrowers enrolled in SAVE, those with a pending SAVE application and those whose loans sit in SAVE-related forbearance must pick a new plan after a MOHELA notice. The servicer gave 90 days from the date of each notice, and the notices went out between July and September 2026. Those windows close between roughly October and December.
Borrowers who do nothing are placed automatically, MOHELA says, in the Standard Repayment Plan or the new Tiered Standard Plan, depending on loan disbursement dates. Borrowers with pending SAVE applications may be moved back to the plan they were in before they applied. MOHELA lists this separately from the autopay deadline.
The two dates interact for one group. A borrower whose loans are still in SAVE-related forbearance gets no autopay discount while the forbearance lasts, because MOHELA suspends autopay during forbearance. Picking a plan is what moves a loan toward repayment, and autopay only starts to matter after that.
That leaves a sequence for MOHELA borrowers still undecided: choose the plan before the notice window closes, confirm the loan is in repayment, then enroll in autopay before 11:59 p.m. ET on Dec. 31. Each step has its own date, and only the last one carries the 1% discount through June 30, 2028.
Is every MOHELA loan on autopay before Dec. 31?
A borrower who misses 11:59 p.m. Eastern on Dec. 31 loses the larger autopay discount MOHELA is offering through June 2028, and a borrower removed after three returned payments loses it too. The plan-choice notices that went out from July to September run on a different clock, so one missed date is easy to blame on the other.
The Bank Account & Debt Protection Kit includes a debt inventory, call log and deadline tracker, so each servicer deadline and each call sits in one place. It also carries the 2-month bank protection rule, which covers how Social Security deposits are protected in a bank account. It does not enroll anyone in autopay.
Get the debt inventory and deadline tracker for loan dates →
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
