The Treasury Department and IRS on September 29 released temporary regulations directing the Treasury Secretary to open a Trump account for every eligible child in the country, “on or about October 1, 2026.”

The rules, published in the Federal Register on September 30 and effective the same day, reverse the position Treasury took in March, when it said it would require a parent to file Form 4547 to open a Trump account for a child.

The reason for the reversal is in Treasury’s own numbers. As of July 30, 2026, the IRS had processed about 5.6 million electronic Forms 4547 against an estimated 73.37 million eligible children, or under 8%. “In most states, the number of processed electronic Forms 4547 was less than 10% of the estimated number of eligible children,” the regulations state. That is only modestly ahead of the 4 million accounts the IRS reported in April, and Treasury concluded an opt-in program would have plateaued “close to 50% of eligible families.”

Why It Matters

Treasury estimates the change will add more than 60 million Trump accounts in 2026 alone, impacting 73 million children in 44 million families. It’s also estimated that roughly two million additional accounts year will be opened going forward.

Every child under 18 with a Social Security number is included, not just the 2025 through 2028 babies who qualify for the $1,000 federal seed deposit. Parents who have been weighing a Trump account against a 529 plan will soon find the Trump account already exists whether they wanted one or not.

It’s important to note that this policy will impact lower-income families significantly more than those at a higher income. Middle- and higher-income families have been opening these accounts at a much higher rate than lower-income families.

Treasury’s Table 1 shows about 8.61 million eligible children in households with no adjusted gross income or a missing return, and roughly 10,000 processed forms for that group, a take-up rate near 0.1%. The agency’s blunt summary: “Proportionately, children in lower income groups are the biggest beneficiaries” of the rule.

That matters for families who have never had a reason to think about how a Trump account affects financial aid because they never had one.

The Catch: Auto-Opened Accounts Do Not Get The $1,000 Automatically

The auto-opened account, which the regulations call an “auto account,” can only accept two kinds of money during the growth period. The first is qualified general contributions from states, tribal governments, and 501(c)(3) nonprofits. The second is the $1,000 pilot contribution, but only “if a pilot program election has been made by a pilot program-electing individual,” which under the March proposed rules is generally the parent claiming the child as a dependent.

Treasury says the statute does not let the Secretary make that election on a family’s behalf, so the $1,000 baby bonus still requires a Form 4547 election.

The auto account also cannot take money from parents, grandparents, or employers. To contribute, a parent or guardian has to “claim” the account through an electronic application or web page, verify their identity, and establish their legal authority to see the child’s tax information.

Claiming triggers a trustee-to-trustee rollover of the full balance into either a “claimed initial Trump account” at Treasury’s trustee or a rollover Trump account at a provider of the family’s choosing. Only then can it accept the $5,000 annual contribution that a standard Trump account allows.

How The Money Gets Invested

Until a family claims it, an auto account’s only holding is an interest in a “master group trust” that Treasury runs for all auto accounts collectively. The trust can hold only eligible investments, meaning U.S. equity index funds charging 0.1% or less with no leverage, plus donated stock and, after the growth period, cash.

Neither the trustee nor the Secretary will have discretion over proxy voting or other corporate actions, which Treasury says keeps administration uniform across tens of millions of accounts. That is a narrower menu than the fund lineups families can choose in a 529 plan.

The regulations also formalize how donors like the Michael & Susan Dell Foundation, which pledged $6.25 billion to children born between 2016 and 2024 living in ZIP codes with median household income below $150,000, will move money in.

Donors contribute to Treasury first, and Treasury then makes equal contributions to every account in a “qualified class” of at least 5,000 beneficiaries defined by birth year, geography, or both. Donated public stock may be held directly in accounts, subject to a five-year minimum holding period. Treasury wrote that donors “prefer that their contributions reach all children, not just children whose parents have the awareness to opt in,” which is a large part of why it built the auto-enrollment structure at all.

For reference, when I opened Trump accounts for my kids, it took about 90 days before the Dell Foundation money was posted.

How This Connects

Treasury’s own math shows why the seed deposit and any class contribution are worth chasing. Using broad U.S. equity returns for birth cohorts from 1926 to 2006, the regulations estimate $1,000 invested at birth grows to a median $6,180 by age 18, with a 10th-percentile outcome of $2,980 and a 90th-percentile outcome of $13,800.

Even $1,000 invested at age 17 lands at a median $1,160 a year later. Those figures track the projections in our Trump accounts explainer, and they are the case for making sure a 2025 through 2028 baby’s parent actually files the pilot election rather than assuming the auto-open handles it.

What’s Next

Treasury will make its first round of elections on or about October 1 and says subsequent rounds will be frequent enough to make parent-initiated openings a “rare exception.”

The temporary rules apply to tax years beginning January 1, 2026, and expire September 30, 2029. A companion proposed rule takes comments through November 30, 2026, including on how ABLE rollovers should work for auto accounts whose beneficiaries Treasury knows nothing about.

Watch for the claim portal’s launch and for whether the IRS moves the pilot election onto the same screen. Until then, the Form 4547 process remains the only path to the $1,000.

The post Treasury Will Auto-Open Trump Accounts For 68 Million Kids Starting October 1 appeared first on The College Investor.

The U.S. Department of Education and the U.S. Department of the Treasury launched the Defaulted Loans Support Center on September 30, 2026, a new section of StudentAid.gov where borrowers with defaulted federal student loans can apply online to rehabilitate or consolidate their loans. According to the joint press release, the portal replaces “outdated websites and burdensome mail and fax-based processes” that have governed default resolution for decades.

It is the first major borrower-facing product to come out of the ED-Treasury partnership that moved defaulted loan collections to Treasury earlier this year.

The portal lives at studentaid.gov/default-support and uses a borrower’s existing StudentAid.gov login. That alone is a change from the old MyEdDebt.ed.gov system, which required a separate account tied to a Social Security number.

This is important give then fact that the Treasury takeover affects 7.8 million defaulted borrowers.

Why It Matters

Student loan default is one of the worst possible financial scenarios for an American.

Collection costs can add up to 20% to what a borrower owes, the government can take federal tax refunds through Treasury offset, and wage garnishment of up to 15% of disposable pay requires no court order. As of December 31, 2025, roughly $179 billion in federal student loans were in default.

The major pathway of student loan rehabilitation has also been historically slow. To begin student loan rehabilitation, a borrower had to call the Default Resolution Group, submit income documentation, and then wait roughly 10 business days for a rehabilitation agreement to arrive by mail.

For the more than 5 million people who have been in default for over six years, a process that starts with a phone call and a mailbox is a real barrier.

What The New Defaulted Borrower Portal Does

The press release lists five functions a defaulted borrower can now handle in one place:

1. Review the consequences of default, including credit reporting and collection actions
2. Compare rehabilitation and consolidation side by side
3. Apply online for either loan rehabilitation or Direct Consolidation
4. Make a payment on a defaulted loan
5. Review repayment plans and loan discharge options

For rehabilitation specifically, the Education Department says borrowers can complete the application, upload documents, see an estimated monthly payment, sign the agreement electronically, and track progress without leaving StudentAid.gov. Rehabilitation still requires nine on-time payments within 10 consecutive months, and the portal changes how you apply, not how long the program takes.

For consolidation, borrowers who apply through the portal and enroll in auto pay can access the temporary 1% interest rate reduction the Education Department announced this summer. Consolidation gets a borrower out of default in weeks rather than months, but as our breakdown of the problems with student loan consolidation explains, the default record stays on the credit report, while rehabilitation removes it.

It’s also important to note for borrowers who consolidate their student loans that they will now face limited repayment plan choices of only RAP or tiered standard.

How It Compares To MyEdDebt

The old MyEdDebt.ed.gov portal let borrowers check loan status, make payments, and view payment history. It did not let them apply for rehabilitation or consolidation online, which is why the Default Resolution Group’s phone line and paper agreements carried so much of the workload. The new website folds those applications into the same account borrowers already use for FAFSA, repayment plan changes, and loan details.

One caveat: as of publication, the Federal Student Aid default FAQ page still references MyEdDebt.ed.gov and the DRG phone number (1-800-621-3115). The press release does not give a shutdown date for the old site, so borrowers with an existing MyEdDebt account should expect both to operate for some period.

We will update our Treasury collections coverage when the department clarifies the transition.

What The Numbers Say

The Education Department reports that since the Treasury partnership launched, approved rehabilitation applications are up 69% and consolidations out of default are up 95%, after a fix to what the department calls “a Biden-era technical issue” that blocked defaulted borrowers from consolidating.

These figures come from the department’s own press release and have not been independently audited. The department also attributes the large number of borrowers in default to the prior administration’s Fresh Start program and the on-ramp period, a characterization the press release makes without supporting data.

According to the same release, borrowers have given positive reviews of the new setup: 89% said it was easy to complete, 86% said they understood their next step, and 84% said it took a reasonable amount of time.

How This Connects

Treasury’s Bureau of the Fiscal Service began contacting roughly 500,000 defaulted borrowers in July 2026, with more aggressive tactics like garnishment and benefit offsets expected to expand after the midterm elections, as we reported in our July collections ramp-up story.

An improved self-service portal to allow borrowers to take action on their default loans themselves is a positive step in the right direction. Our reporting on the Treasury handoff noted that the Fiscal Service cut about 40% of its workforce between September 2024 and February 2026, which makes an online application more important, not less, since fewer staff are available to process paper.

What’s Next

Watch for a shutdown date for MyEdDebt.ed.gov and for the Education Department to update its own default FAQ pages to point to the new center.

Starting July 1, 2027, borrowers will be able to rehabilitate a loan twice instead of once, and the portal is where that second chance will presumably be processed.

Borrowers in default should log in at studentaid.gov/default-support, compare the two options, and start an application before Treasury’s outreach turns into garnishment.

The post Education Department And Treasury Launch Online Portal For Student Loan Borrowers In Default appeared first on The College Investor.

The post Pay As You Earn (PAYE): How It Works And What Happens When It Ends In 2028 appeared first on The College Investor.

The post Best Student Loan Rates for September 29, 2026: Ascent Leads at 1.94% appeared first on The College Investor.

The U.S. Department of Education announced on September 29, 2026 that it was extending the enrollment window for its temporary 1% student loan interest rate reduction by three months. Borrowers who enroll in auto pay by December 31, 2026, or who are already enrolled, keep the reduced rate through June 30, 2028. The original deadline would have closed at the end of September. The 1% discount replaced the old 0.25% auto pay discount on July 1, 2026 for eligible borrowers.

The Department says nearly 2 million borrowers have signed up for auto pay since the benefit was announced this summer. Under Secretary of Education Nicholas Kent said in the statement that the discount is already lifting repayment rates across the federal portfolio, which has been struggling as 9.3 million borrowers sit in default.

Why It Matters

For a borrower with a $40,000 balance, the extra 0.75% discount over the 0.25% legacy discount is worth roughly $600 in saved interest across the two-year window. Larger balances save more, and the discount applies to any Federal Direct Loan originated after July 1, 2012, including Parent PLUS loans.

The extension also buys time for the millions of borrowers still leaving the SAVE plan. Each SAVE borrower gets a 90-day window to pick a new plan once their notice arrives, and only about half of borrowers have received a notice, according to The College Investor’s estimates. A September 30 cutoff would have shut out borrowers who never had a chance to enroll in a lawful plan before the deadline.

Furthermore, enrolling in Auto Pay also requires you to be enrolled in a repayment plan. According to many comments we’ve seen on our platforms, several loan servicers are struggling to process repayment plan applications in a timely manner, with borrowers reporting wait times of several months. As such, those borrowers who applied on time have not been able to access the auto-pay discount as a result of their loan servicer’s failure.

Who Qualifies And How To Enroll

The Department’s press release spells out four groups:

• Already enrolled in auto pay: Nothing to do. Servicers adjusted these rates to the 1% reduction automatically when the benefit launched.
• Not yet enrolled: Log in to your servicer account, select auto pay from the menu, enter bank account details, and confirm the payment amount. You must stay enrolled and eligible to keep the discount.
• Former SAVE borrowers: The discount applies once you have moved into a different, active repayment plan such as RAP, IBR, or Standard. This must be completed by the December 31 deadline.
• Borrowers in default: You must first log in to StudentAid.gov, consolidate eligible loans, apply for a repayment plan, and then enroll in auto pay. The discount becomes available only after the loans return to good standing. It’s important to note that rehabilitation won’t meet the deadline since rehabilitation requires 9 on-time payments.

That last group faces the most pressure. Wage garnishment on defaulted loans restarts this fall, taking up to 15% of a borrower’s without a court order, so getting out of default before December 31 now carries a rate discount on top of stopping collections.

Why The Department Is Pushing Auto Pay

The 1% discount is a carrot to encourage borrowers to enroll in a repayment plan and resume making payments.

This comes alongside the new Repayment Assistance Plan, which waives unpaid interest and adds a matching principal payment of up to $50 each month, but only when the borrower makes a full, on-time payment. On RAP, paying early can reduce the interest waiver, and paying late forfeits both benefits for that month. Auto pay removes this problem entirely.

The same logic applies to Public Service Loan Forgiveness, which requires 120 on-time qualifying payments. A late payment is a month that does not count. The Department is betting that fewer missed payments will mean fewer new defaults after a year in which the defaulted portfolio grew by roughly 1.6 million borrowers and $54 billion.

How This Connects

The extension follows a year of stop-and-start collections policy. The Department paused wage garnishment and tax refund offsets in early 2026 to roll out RAP, then handed collections to the Treasury Department, which began ramping up contact with defaulted borrowers in July.

The auto pay discount is the incentive side of that same strategy: reward borrowers who stay current while the penalties for falling behind return.

The auto pay discount will help borrowers on the Standard or Tiered Standard plans the most, where a lower rate means more of each payment hits principal – shaving time off repayment. Borrowers on income-driven plans see less direct benefit, since their monthly payment is set by income rather than balance, but the discount still trims total interest and auto pay protects the RAP subsidy that matters more for them.

What’s Next

Watch the Department’s next Federal Student Aid data release for whether auto pay enrollment moves the delinquency numbers, and whether SAVE exit notices keep pace with the December 31 deadline.

A second extension is possible if a large share of SAVE borrowers are still in forbearance in December, but the Department has not signaled one. Borrowers who enroll by December 31 lock in the discount through June 30, 2028.

The post Education Department Extends 1% Student Loan Auto Pay Discount Deadline To December 31 appeared first on The College Investor.