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The Trump administration says it’s cutting student loan interest: What that means

The Department of Education will temporarily lower interest rates for federal student loan borrowers using autopay. This reduction begins July 1. The move follows the introduction of the 2025 One Big Beautiful Bill Act.

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What changed

The specific eligibility requirement of using autopay and the July 1 start date are now confirmed.

Live updates

  1. Education Department Cuts Student Loan Interest for Autopay Users

    The Department of Education will temporarily lower interest rates for federal student loan borrowers using autopay. This reduction begins July 1. The move follows the introduction of the 2025 One Big Beautiful Bill Act.

    What's confirmed:

    • The Department of Education will temporarily reduce interest rates for federal student loan borrowers enrolled in autopay starting July 1.
    • The interest rate reduction is 1%.
    • Borrowers in the SAVE plan are not required to leave that plan until September 29 at the earliest.

    Still unconfirmed:

    • The 2025 One Big Beautiful Bill Act introduces new lifetime borrowing caps and ends Grad PLUS loans.
    • The New York Federal Reserve stated that eliminating the SAVE plan could increase borrower defaults.
    • The interest rate trim will last for two years.
    confidence 90%

  2. Trump Administration Announces 1% Student Loan Interest Rate Cut

    The Department of Education is implementing a temporary 1% interest rate reduction for certain federal student loan borrowers. The move aims to combat rising delinquencies within a $1.7 trillion loan portfolio. Eligible borrowers must meet specific criteria to receive the discount.

    What's confirmed:

    • The Trump administration is reducing federal student loan interest rates by 1%.
    • Eligible borrowers must enroll in automatic payments to qualify for the discount.
    • The federal student loan portfolio is valued at $1.7 trillion.

    Still unconfirmed:

    • The interest rate reduction requires loan consolidation and good standing.
    • The rate cut excludes most of 9 million borrowers.
    confidence 90%

  3. Trump Administration Increases Interest Rate Discount for Autopay Borrowers

    The Trump administration is providing a larger interest rate discount for federal student loan borrowers who use autopay. Eligible borrowers must enroll in automatic payments to qualify. These changes begin July 1.

    What's confirmed:

    • The Trump administration will offer federal student loan borrowers who sign up for autopay a larger interest rate discount.
    • Eligible federal student loan borrowers can receive a temporary 1 percent interest rate reduction.
    • Borrowers must enroll in automatic payments to qualify for the discount.
    • The changes take effect July 1.
    confidence 100%

  4. Trump Administration Announces Student Loan Interest Rate Cuts

    The U.S. Department of Education will offer a temporary 1 percent interest rate reduction for eligible federal student loan borrowers. To qualify, borrowers must enroll in automatic payments and may need to consolidate loans. These changes take effect July 1.

    What's confirmed:

    • The U.S. Department of Education announced a 1 percent interest rate reduction for federal student loan borrowers enrolled in auto pay starting July 1.
    • The interest rate reduction is temporary.
    • Eligible federal Direct Loan borrowers who use automatic payments qualify for the discount.
    • Some borrowers may need to consolidate their loans to qualify for the reduction.

    Still unconfirmed:

    • Rates on new student loans will rise on July 1.
    • The Trump administration wants to jumpstart repayment as federal student loan debt approaches $2 trillion.
    • A Republican tax and budget bill makes major changes to the federal student loan program.
    confidence 95%