Sponsors (5)
Want the short version? I can break this bill down for you
This is not an official government website.
Copyright © 2026 PLEJ LC. All rights reserved.
Automatically lowers interest on many federal student loans to 2% by directing the Department of Education to modify or refinance eligible loans without requiring borrowers to apply. Borrowers whose loans are not already held by the Department may opt out of the automatic refinance. Sets a 2% interest rate for specified new Federal Direct Loans first disbursed or applied for on or after the first July 1 following enactment and requires reporting to Congress on implementation and borrower delinquency. This would reduce monthly payments and total interest for many borrowers and require significant operational work by the Department and loan servicers.
Strike the phrase "and (2)" and insert the phrase "(2)" in Section 451(a) of the Higher Education Act of 1965.
Insert text following an unspecified location as written: the legislative text states "by inserting after ." with no further text provided in this section.
The Secretary shall establish and implement procedures to modify, without any action from the borrower, the terms of each eligible Federal loan held by the Secretary so that beginning on the first July 1 after the date of enactment the applicable rate of interest is 2.0 percent on the unpaid principal balance of the loan.
The Secretary shall establish and implement procedures to refinance, without any action from the borrower (except that the borrower may opt out), each eligible Federal loan not held by the Secretary as a Federal Direct Consolidation Loan in accordance with the section's requirements.
When refinancing an eligible Federal loan not held by the Secretary, the Secretary shall make a Federal Direct Consolidation Loan in an amount equal to the sum of the unpaid principal, accrued unpaid interest, and late charges of the eligible loan not held by the Secretary.
Inserts a new subparagraph (F) after subparagraph (E) and redesignates existing subparagraph (F) as (G); the new subparagraph (F) sets the applicable interest rate at 2.0 percent for specified Federal Direct loan types when the first disbursement is made or the application is received on or after the first July 1 following enactment of the Affordable Loans for Students Act.
Adds a new section (section 460A) to Part D of title IV (20 U.S.C. 1087a et seq.) establishing a program to modify eligible Federal loans held by the Secretary and to refinance eligible Federal loans not held by the Secretary into Federal Direct Consolidation Loans with specified terms (including 2.0% interest rate, no origination fees for refinanced loans, preservation of repayment period, and reporting requirements).
Conforming amendment to section 428C(a)(3)(B)(i)(V) that strikes the period at the end of listed items (cc) and (dd), replaces with semicolons, and adds additional text at the end of the provision.
Referred to the House Committee on Education and Workforce.
Introduced March 10, 2025 by Michael Lawler · Last progress March 10, 2025
Expand sections to see detailed analysis
Referred to the House Committee on Education and Workforce.
Introduced in House