The U.S. Department of Education announced a temporary 1% reduction in federal student loan interest rates aimed at making repayment easier beginning July 1. Education Undersecretary Nicholas Kent said the move would improve “the overall health of the federal student loan portfolio.” The rate cut is not automatic for most borrowers. It applies only to a subset of federal Direct Loan borrowers issued after July 1, 2012 who are enrolled in automatic payments, with others needing to take steps such as consolidation and enrolling in auto-pay to qualify. With nearly 9 million borrowers in default, the department’s incentive is designed to increase automatic payment enrollment—currently about 40%—but many borrowers will still need to regain eligibility by exiting default and moving into new repayment arrangements before they see savings.