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Auto Debit Interest Rate Reduction

Save yourself time and ensure your scheduled payments will be made on-time each month by setting up automatic payments. There is no need to rush to the mailbox each month or worry about logging in to make a manual web payment. It’s free to apply!

Applying and being approved by MOHELA for scheduled automatic payments to be electronically debited from your banking institution may qualify you for a 0.25% interest rate reduction. Not all lenders offer the 0.25% interest rate reduction (subject to conditions). NOTE: The following loan statuses are ineligible for Auto Debit:

  • In School
  • Grace
  • Forbearance
  • Deferment
  • Bankruptcy

Keep in mind this reduction remains in effect while you are actively participating in the Auto Debit program. Please note:

  • Auto Debit will not be in effect during periods of deferment or forbearance, and as a result, you will not receive the 0.25% interest rate reduction during these periods. Auto Debit will resume at the end of your deferment or forbearance, as will the 0.25% interest rate reduction.

  • If three consecutive payments returned due to insufficient funds, this will result in the removal of Auto Debit and the loss of the 0.25% interest rate reduction. (Other conditions may apply.)


You can apply for Auto Debit generally at any time. However, for MOHELA to enroll you in Auto Debit, your loan(s) must have an active repayment schedule. How your application is processed depends on your loan type.

  • For Direct Loans (DL) and federally-owned FFEL program loans, if the loan(s) you are trying to enroll do not have an active repayment schedule and they are within 180 days of entering repayment, your Auto Debit application will be placed on hold and processed once the active repayment schedule is available. We will send you notification if your application is placed on hold.

  • For MOHELA owned commercial FFEL program loans, if the loan(s) you are trying to enroll do not have an active repayment schedule, your application will be denied. You can send a secure message through your online account or call to request your Auto Debit application be reprocessed within one year of the date your application is signed if an active repayment schedule becomes available.


Apply for Auto Debit through your online account and review the Auto Debit Authorization Agreement – Disclosure Statement for Recurring Auto Debit Payments for complete information.