{"id":5035,"date":"2026-06-19T17:31:36","date_gmt":"2026-06-19T17:31:36","guid":{"rendered":"https:\/\/houstonmovingjournal.com\/?p=5035"},"modified":"2026-06-19T17:31:36","modified_gmt":"2026-06-19T17:31:36","slug":"trump-administration-to-cut-student-loan-interest-rates","status":"publish","type":"post","link":"https:\/\/houstonmovingjournal.com\/?p=5035","title":{"rendered":"Trump administration to cut student loan interest rates"},"content":{"rendered":"
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\"\"<\/figure>\n article<\/span><\/div>

FILE-Student loan borrowers gather near The White House for a cancel student debt protest on May 12, 2020 in Washington, DC. (Photo by Paul Morigi\/Getty Images for We, The 45 Million)<\/span> <\/p>

Read more The history of Juneteenth and how it became a federal holiday<\/a><\/p> <\/div><\/div> <\/div>

The Department of Education is reducing interest rates for student loans, referring to it as a part of a broader plan to make higher education more affordable.\u00a0<\/p>

According to The Associated Press, the Trump administration floated a temporary 1% cut in student loan interest rates as relief for borrowers enduring challenges repaying their loans.\u00a0<\/p>

RELATED:<\/strong> Why student loan delinquencies are soaring – and credit scores are dropping<\/u><\/strong><\/p>

<\/div>

However, this change does not apply to all student loan borrowers, and those seeking the reduction must meet certain eligibility requirements.\u00a0<\/p>

Here\u2019s what you need to know.\u00a0<\/p>

Which student loan borrowers are eligible for the student loan interest rate cut?<\/h2>

Why you should care:<\/p>

The Associated Press reported that the interest rate change will only impact a portion of student loan borrowers, specifically those with federal Direct Loans issued after July 1, 2012, who are already enrolled in automatic payments or signing up for them.<\/p>

For student loan borrowers to qualify, there\u2019s a process they must follow, including signing up for auto pay and, in some cases, consolidating their loans.<\/p>

RELATED:<\/strong> Trump administration resuming interest charges for nearly 8M student loan borrowers<\/u><\/strong><\/p>

Approximately 40% of student loan borrowers are enrolled in auto pay \u2014 a statistic the Department of Education is hoping to boost with the new incentive of the interest rate cut.<\/p>

Read more TSA sounds alarm after World Cup fans pack their bags with American staple<\/a><\/p>

Almost 9 million student loan borrowers are in default, meaning they have missed nine months of payments.\u00a0<\/p>

For student loan borrowers to become eligible for the interest rate cut, they are required to return in good standing, usually by consolidating their loans and then applying for a new repayment plan.\u00a0<\/p>

How much of an interest rate cut will student loan borrowers see?<\/h2>

By the numbers:<\/p>

The Associated Press reported that the Department of Education announced that student loan borrowers enrolled in auto pay will be eligible for a 1% interest rate cut starting July 1.\u00a0<\/p>

But student loan borrowers already enrolled in auto pay, likely won\u2019t see signigicant savings. Borrowers who currently use auto pay already receive an interest-rate discount of 0.25%, so the new reduction removes only 0.75%.<\/p>

The slight student loan interest rate reduction will be temporary, lasting through June 30, 2028.<\/p>

According to the AP, the federal student loan portfolio has spiked to nearly $1.7 trillion, with millions of borrowers struggling to maintain their monthly payments.\u00a0<\/p>

Furthermore, the goal of the student loan interest rate reduction is to get more borrowers back on track with student loan payments.\u00a0<\/p>

Separately, the Department of Education is offering its own borrower plans for repayment, including an income-driven option.<\/p>

Read more Government regulations add nearly $132K to cost of new home, builders say<\/a><\/p>

\u00a0<\/p> <\/div>","protected":false},"excerpt":{"rendered":"

With millions of student loan borrowers in default, the Trump administration announced a plan for a slight reduction in student loan interest rates to provide some relief for borrowers paying back their loans.<\/p>\n","protected":false},"author":1,"featured_media":5033,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,68,28,67],"tags":[],"class_list":["post-5035","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-consumer","category-education","category-money","category-politics"],"yoast_head":"\nTrump administration to cut student loan interest rates - Houston Moving Journal<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/houstonmovingjournal.com\/?p=5035\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Trump administration to cut student loan interest rates - 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