The Department of Education quietly rolled out new regulations regarding payments for millions of student loan borrowers, a change that could have an especially significant impact on those pursuing Public Service Loan Forgiveness (PSLF). One is a change to the interest benefit for those enrolled in autopay, the feature that allows servicers to automatically withdraw borrowers’ monthly payments from their online banking accounts. Those who are enrolled will now see a whopping 1% reduction in the interest on their federal student loans. This is great news for all borrowers as it will reduce their final balance, which will ultimately lower the tax burden on any loans that are forgiven.
On a less-positive note, the Department will also be taking a closer look at when payments are made and potentially penalize borrowers whose payments are late. While implementing new regulations from the OBBBA, Federal Student Aid slipped in new guidance for borrowers on IDR plans: “Late payments may be reported to credit bureaus and could damage your credit history.” The outcome for borrowers pursuing PSLF and IDR forgiveness, however, carries an extra sting. Starting July 1, 2026, late payments will no longer count towards your qualifying payments for forgiveness. In other words, if you miss your due date, you’ll add another month that you have to pay. It’s unclear exactly why this latter regulation was needed, but borrowers pursuing loan forgiveness will need to be extra careful to make sure their payments are made on time.
If you have questions about these or other new regulations, reach out. We can explain all the recent changes and where the law currently stands. We can also help you enroll in autopay if you haven’t already. Some borrowers with MOHELA have had particular troubles enrolling—let us know if this has happened to you and we can help!
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