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U.S. Department of Education Announces Student Loan Interest Rate Reduction

Federal student loan borrowers using automatic payments will receive a 1 percent interest rate reduction starting July 1, 2026. This change allows a larger portion of each payment to reduce the loan balance. Borrowers must enroll in autopay by September 30, 2026, to qualify.

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What changed

Confirmed the July 1, 2026, effective date for the interest rate discount.

Live updates

  1. U.S. Department of Education Cuts Student Loan Interest Rates for Autopay

    Federal student loan borrowers using automatic payments will receive a 1 percent interest rate reduction starting July 1, 2026. This change allows a larger portion of each payment to reduce the loan balance. Borrowers must enroll in autopay by September 30, 2026, to qualify.

    What's confirmed:

    • The U.S. Department of Education is reducing federal student loan interest rates by 1 percent for borrowers enrolled in autopay.
    • The interest rate reduction takes effect on July 1, 2026.
    • A lower interest rate increases the share of each payment that reduces the loan balance instead of covering interest.

    Still unconfirmed:

    • Representative Anna Paulina Luna is seeking a House vote to cap federal student loan interest rates at 2 percent.
    confidence 90%

  2. U.S. Department of Education Implements 1% Student Loan Interest Rate Cut

    Federal student loan borrowers using autopay qualify for a 1 percent interest rate reduction starting July 1. To receive the discount, borrowers must be enrolled in automatic payments by September 30, 2026.

    What's confirmed:

    • Federal student loan borrowers enrolled in autopay are eligible for a 1 percent interest rate reduction beginning July 1.
    • Borrowers must enroll in autopay by September 30, 2026, to receive the benefit.

    Still unconfirmed:

    • The interest rate reduction is tied to President Donald Trump's One Big Beautiful Bill Act.
    • The Trump administration implemented the cut to address a $1.7 trillion federal student loan portfolio and rising delinquencies.
    confidence 90%

  3. Education Department Reduces Student Loan Interest Rates for Autopay Users

    The U.S. Department of Education will offer a 1 percent interest rate reduction for federal student loan borrowers who enroll in autopay. This temporary benefit begins July 1. Borrowers must meet specific eligibility criteria to receive the discount.

    What's confirmed:

    • Federal student loan borrowers enrolled in auto pay are eligible for a 1 percent interest rate reduction beginning July 1.
    • The interest rate reduction is a temporary measure.
    • The Trump administration is implementing the interest rate cut.
    confidence 100%