US Education Department offers two-year trim on student loan interest rates

The U.S. Education Department will temporarily reduce federal student loan interest rates by one percentage point for borrowers enrolled in auto pay from July 1, 2026, through June 30, 2028. Borrowers already using auto pay will automatically receive an additional 0.75 percentage point reduction, building on an existing 0.25 percentage point discount. The initiative aims to help borrowers pay down balances and improve the federal loan portfolio's health.