U.S. government program easing debt for public service workers
The Education Department has announced a two-year, temporary 1% reduction in interest rates for Direct Loans issued after July 2012, available to autopay borrowers through June 30, 2028. Eligible borrowers on autopay will see the discount automatically, with action required only for new enrollments by Sept. 30, 2026. The policy forms part of a broad overhaul of repayment plans under the One Big Beautiful Bill Act.
A U.S. district judge has vacated the Education Department’s final PSLF rule, delaying new eligibility standards for Public Service Loan Forgiveness as lawsuits challenge the changes. The decision comes a day before the rules were to take effect. No comment has been announced by the Education Department.
Borrowers face a sweeping overhaul as the One Big Beautiful Bill Act phases out older repayment plans and introduces two new options. SAVE borrowers will be notified to switch within 90 days, or be moved to the standard or Tiered Standard plan. New caps and programs affect graduates, parents, and new borrowers.