Trump Administration Cuts Federal Student Loan Interest by 1%

The U.S. Education Department, under the Trump administration, announced a temporary 1% reduction in federal student loan interest rates on June 18, 2026. This move aims to alleviate repayment burdens for borrowers amid rising default rates and make higher education more affordable. The temporary rate cut is positioned as a measure to support struggling borrowers and improve the federal student loan portfolio's health. Education Undersecretary Nicholas Kent stated the change is intended to simplify loan repayment. The initiative follows a period of increasing student loan defaults across the nation.