hold on there's just too much going on in Congress lmao...
Sets federal student loan interest rates to 2% starting July 2026.
Introduced by Rep. Mike Thompson (D-CA) and Rep. James Moylan (R-GU).
Introduced in the House of Representatives, referred to committee.
This bill proposes to amend the Higher Education Act of 1965 to set the interest rate for all federal direct student loans, including consolidation loans, at a fixed 2% for loans disbursed or applied for on or after July 1, 2026. It also applies this 2% rate to existing federal loans that currently have higher rates. The bill was introduced by Congressman Mike Thompson, a Democrat from California, and Congressman James Moylan, a Republican from Guam, and has been sent to the House Committee on Education and Workforce for review. This means it has not yet been voted on by the full House.
Introduced Mar 4, 2026
This bill is currently in the 'Introduced' stage in the House of Representatives. It was referred to the House Committee on Education and Workforce for consideration. For it to become law, it would need to be approved by this committee, pass a vote in the full House, then pass a vote in the Senate, and finally be signed by the President.
If this bill becomes law, all new Federal Direct Stafford Loans, Unsubsidized Stafford Loans, PLUS Loans, and Direct Consolidation Loans disbursed or applied for on or after July 1, 2026, would have a fixed 2% interest rate. Additionally, if you have existing federal direct student loans (including consolidation loans) with an interest rate higher than 2%, your rate would automatically be reduced to 2% starting July 1, 2026, unless you choose to opt out after receiving a notification. The bill also allows borrowers with older Federal Family Education Loan (FFEL) consolidation loans to consolidate them into a Federal Direct Consolidation Loan to qualify for the 2% rate.
Supporters Say
Supporters would argue this bill makes higher education more affordable and reduces financial burdens for millions of student loan borrowers.
Critics Say
Critics might raise concerns about the significant financial cost to the government or potential impacts on the overall federal budget.
While the bill text does not specify arguments, proponents of lowering student loan interest rates generally emphasize the positive economic impact of reduced debt, such as enabling graduates to save more, buy homes, or start businesses. They would also highlight the relief it would provide to struggling borrowers. On the other hand, those who oppose such measures often point to the potential expense for taxpayers, as the government would forgo significant revenue from interest payments. They might also discuss the long-term sustainability of such a low fixed rate.