The U.S. Department of Education announced a temporary 1% reduction in interest rates for eligible federal student loans, pitching the change as immediate relief for borrowers struggling with repayment. Education Undersecretary Nicholas Kent said the move is intended to make repayment “easier than ever” and improve the health of the federal student loan portfolio. The rate cut applies only to a subset of borrowers: those with Direct Loans issued after July 1, 2012, who are enrolled in automatic payments or sign up for auto-pay. For borrowers already in auto-pay, the savings are smaller because they already receive a 0.25% interest-rate discount; the new reduction effectively totals 0.75% for that group. With nearly 9 million borrowers in default, the Education Department’s eligibility pathway requires some borrowers to first move back into good standing—typically by consolidating loans and then applying for a new repayment plan. Officials said the 1% reduction begins July 1 and runs through June 30, 2028.