The Trump administration announced a reduction in interest rates for federal student loans, aiming to make higher education more affordable. The Education Department described the temporary, 1% reduction as a way to help borrowers struggling with repayment.

Eligibility and Details

The change will only affect a subset of borrowers, specifically those with federal Direct Loans issued after July 1, 2012, who are enrolled in automatic payments or sign up for them. Currently, just 40% of borrowers are enrolled in auto pay, and the department hopes to increase this number with the new incentive.

To qualify, borrowers must take a set of actions, including signing up for auto pay and, in some cases, consolidating their loans. Nearly 9 million student loan borrowers are in default and must get back in good standing to become eligible for the rate reduction.

The federal student loan portfolio has grown to almost $1.7 trillion, with millions of borrowers struggling to keep up. The rate reduction aims to help get more Americans back on track with student loans as the Trump administration works to rein in rising rates of delinquency and defaults on student loans.

Original reporting: WPBF (Treasure Coast / Hearst) — read the source article.