The U.S. Department of Education announced it will lower federal student loan interest rates for borrowers for two years, citing high default rates. The agency also said the change will apply broadly within federal loan rules, aiming to reduce total borrowing costs and improve repayment outcomes. In a separate federal move, the Education Department also raised the incentive for borrowers who enroll in autopay. Starting July 1, borrowers who opt into autopay will receive a larger temporary interest-rate reduction—boosting payment effectiveness through June 30, 2028. Together, the steps signal a near-term shift in how the federal student aid system manages borrower risk and repayment behavior for the coming school year.