Trump administration to cut student loan interest rates
The temporary reduction applies only to eligible federal Direct Loan borrowers and aims to encourage automatic payments, officials said.
- On July 1, the Department of Education will implement a 1% interest rate cut for borrowers enrolled in auto pay, a temporary measure authorized by Trump to provide relief for those struggling to repay federal loans.
- The federal student loan portfolio has spiked to nearly $1.7 trillion, leaving millions struggling; the Department hopes this incentive will boost auto pay enrollment, currently approximately 40% of borrowers.
- Eligibility is limited to federal Direct Loans issued after July 1, 2012, and because borrowers already using auto pay receive a 0.25% discount, the new policy effectively provides an additional reduction of only 0.75%.
- Almost 9 million borrowers are in default after missing nine months of payments; to qualify, they must return to good standing by consolidating their loans and selecting a new repayment plan.
- Lasting through June 30, 2028, the reduction is temporary, and the Department intends for this policy to help more borrowers get back on track with their monthly student loan payments.
26 Articles
26 Articles
Trump's student loan rate cut excludes most of the 9 million borrowers in default
The Education Department on Thursday announced a reduction in interest rates for federal student loans, describing it as part of a plan to make higher education more affordable. With growing numbers of borrowers in default, the Trump administration pitched the temporary, 1% reduction in student loan interest rates as a salve for those struggling with repayment. Education Undersecretary Nicholas Kent said the change is a way of “making student lo…
The Trump administration announced that it will temporarily reduce the interest on some federal student loans. We tell you who qualifies
Education Department to Temporarily Reduce Student Loan Interest Rate
The Education Department announced on Thursday a 1 percent reduction in federal student loan interest rates for borrowers enrolled in automatic payments starting next month. The interest rate reduction will apply to student loan borrowers who are already enrolled in autopay or who enroll by Sept. 30, and will take effect from July 1 through June 30, 2028, according to the department’s statement. Autopay is a payment method that automatically ded…
US Education Department offers two-year trim on student loan interest rates • Washington State Standard
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…
US Education Dept. offers 2-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…
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