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NewsABC Action News (WFTS) — NewsAugust 19, 2026Hillsborough

Trump administration offers 1% interest rate reduction for student loan borrowers enrolled in auto-pay

The Department of Education is offering a 1% interest rate reduction for federal student loan borrowers who enroll in auto-pay by September 30. This comes as lawmakers in Washington debate broader proposals to cap or eliminate student loan interest rates amid rising monthly payment burdens.

student loanshigher educationinterest ratesfederal policydebt relief
Read the full story at ABC Action News (WFTS) — News

Why It Matters

Federal student loan borrowers have until September 30 to enroll in to receive a 1% interest rate reduction, potentially lowering their monthly financial obligations.

Key Facts

  • Federal student loan borrowers enrolled in auto-pay are eligible for a 1% interest rate reduction.
  • The deadline to enroll in auto-pay to receive the rate reduction is September 30.
  • The current federal student loan interest rate is 6.52%.
  • The average monthly student loan payment was $434 earlier this year.
  • Coding errors in the Public Service Loan Forgiveness program have delayed forgiveness for some borrowers.
  • Rep. Anna Paulina Luna is proposing a bill to cap federal student loan interest at 2%.
  • Democratic lawmakers have introduced legislation to eliminate student loan interest entirely.
  • Some Republican lawmakers have expressed support for lowering current interest rates.

Who's Mentioned

organizationDepartment of Education“Federal agency managing student loan programs”personAnna Paulina Luna“U.S. Representative from Florida”other6.52%“Current student loan interest rate”personPeter Welch“U.S. Senator from Vermont”personJoe Courtney“U.S. Representative from Connecticut”