Student Loan Interest Rate Cut Aims to Ease Repayment Costs as Delinquencies Rise
The policy change is part of a July 2025 spending bill that also ends the Grad PLUS loan program and affects millions of borrowers.
- On Thursday, the U.S. Department of Education announced a temporary 1 percentage point interest rate reduction for federal student loan borrowers enrolled in auto pay, effective July 1, 2026.
- This incentive follows major changes to the federal student loan system stemming from the tax and spending cut bill President Donald Trump signed last year, with provisions also taking effect July 1.
- Under Secretary of Education Nicholas Kent said the initiative is estimated to cost the agency $6 billion, with a 6% interest rate dropping to 5%, for instance.
- Borrowers must opt in to auto pay by September 30, 2026, to secure the two-year benefit, which applies to federal student loans originated after July 1, 2012.
- The federal student loan portfolio stands at $1.7 trillion, and the department is preparing wider system adjustments, including new repayment plan rules, that also launch on July 1.
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US Education Department offers two-year trim on student loan interest rates - McPherson Sentinel
By: Shauneen MirandaKansasReflector.com WASHINGTON — The U.S. Department of Education will temporarily reduce interest rates for federal student loan borrowers enrolled in auto pay starting… Login to continue reading Login Sign up for complimentary access Sign Up Now Close
US Education Department offers two-year trim on student loan interest rates • Oklahoma Voice
The U.S. Education Department will temporarily lower interest rates for student loan borrowers who use the auto pay feature. (Photo illustration via Getty Images) WASHINGTON — The U.S. Department of Education will temporarily reduce interest rates for federal student loan borrowers enrolled in auto pay starting July 1, the agency announced Thursday. Borrowers who enroll in auto pay — the optional feature that allows a borrower to have their mon…
Omaha World-Herald
Don't wait: What borrowers need to know about changing student loan plans
Changes taking effect July 1 could affect millions of borrowers who carried an average of $33,770 in student debt in 2025, according to the Education Data Initiative.
Nebraska Examiner
US Education Department offers two-year trim on student loan interest rates
The U.S. Education Department will temporarily lower interest rates for student loan borrowers who use the auto pay feature. (Photo illustration via Getty Images) WASHINGTON — The U.S. Department of Education will temporarily reduce interest rates for federal student loan borrowers enrolled in auto pay starting July 1, the agency announced Thursday. Borrowers who enroll in auto pay — the optional feature that allows a borrower to have their mon…
Student loan autopay discount cut lands just ahead of July repayment reset
Eligible federal Direct Loan borrowers who use auto pay get a temporary 1-point interest-rate cut from July 1, 2026, to June 30, 2028, as new loan rates rise to 6.52%-9.07%; the U.S. Education Department aims to boost repayment rates after auto-pay enrollment fell to 40% post-pandemic, with the two-year discount estimated to cost $6 billion. The post Student loan autopay discount cut lands just ahead of July repayment reset appeared first on Tec…
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