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Education Department Lowers Student Loan Interest Rates for Two Years

The U.S. Department of Education is reducing interest rates by 1% for federal student loan borrowers who use autopay. This measure begins July 1, 2026. The administration intends for the cut to last two years.

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What changed

New reports link the interest rate cut to a broader system overhaul and new college accountability rules.

Live updates

  1. Education Department Implements 1% Student Loan Interest Cut

    The U.S. Department of Education is reducing interest rates by 1% for federal student loan borrowers who use autopay. This measure begins July 1, 2026. The administration intends for the cut to last two years.

    What's confirmed:

    • Student loan borrowers using autopay are eligible for a 1% interest rate reduction starting July 1.

    Still unconfirmed:

    • The Department of Education views the student loan system overhaul as a way to simplify programs and lower tuition costs.
    • A new Trump administration rule will link college access to federal loans based on graduate earnings.
    confidence 90%

  2. Trump Administration Cuts Federal Student Loan Interest Rates by 1%

    The U.S. Department of Education will reduce interest rates for federal student loan borrowers using autopay starting July 1, 2026. The Trump administration implemented the 1% cut to address rising delinquencies. This temporary reduction lasts for two years.

    What's confirmed:

    • The Department of Education will reduce federal student loan interest rates for autopay enrollees starting July 1, 2026.
    • The Trump administration cut student loan interest rates by 1% to combat surging delinquencies.
    • The federal student loan portfolio is valued at $1.7 trillion.

    Still unconfirmed:

    • Borrowers in the SAVE plan should not be forced into other repayment plans according to an amended lawsuit.
    confidence 100%

  3. Education Department Increases Student Loan Autopay Interest Discount

    The U.S. Department of Education will lower interest rates for federal student loan borrowers who utilize autopay. This temporary reduction lasts for two years. The change begins July 1, 2026.

    What's confirmed:

    • The Department of Education is raising the student loan autopay interest discount from 0.25% to 1% on July 1, 2026.
    • The interest rate reduction for borrowers using the auto pay feature is temporary.
    confidence 100%

  4. Education Department Cuts Student Loan Interest Rates for Auto Pay Users

    The U.S. Department of Education is implementing a temporary interest rate reduction for federal student loan borrowers. To qualify for the benefit, borrowers must enroll in auto pay. The changes take effect on July 1.

    What's confirmed:

    • Federal student loan borrowers enrolled in auto pay will be eligible for a 1 percent interest rate reduction beginning July 1.
    • The interest rate reduction is a temporary measure lasting for two years.
    • The Trump administration is implementing these cuts to encourage student loan repayment.

    Still unconfirmed:

    • The interest rate reduction benefits over 12 million delinquent borrowers.
    • Parent PLUS borrowers face risks regarding forgiveness and repayment options after July 1.
    confidence 90%