hold on there's just too much going on in Congress lmao...
Eases rules on bonds that fund student loans.
Sen. Grassley (R-IA) with Sens. Welch (D-VT) and Cassidy (R-LA).
Introduced in Senate, referred to Finance Committee.
This bill removes two tax restrictions on 'qualified student loan bonds' – bonds states issue to raise money for student loans. Currently, these bonds count against annual state volume caps and can trigger the alternative minimum tax for investors, making them less attractive. The sponsor, Senator Grassley, is the ranking Republican on the Finance Committee. The bill is early in the process; it needs committee passage, full Senate vote, House approval, and presidential signature.
Introduced Feb 3, 2026
This bill is under review by a committee. The committee holds hearings, gathers testimony from experts and stakeholders, and may propose amendments. If the committee votes to advance it, the bill moves to the full chamber for debate and a vote.
By exempting these bonds from the volume cap, states can issue more bonds to fund student loans without competing with other projects. Removing the alternative minimum tax exemption makes the bonds more appealing to investors, which can lower the interest states pay, potentially passing savings to borrowers. The changes only apply to bonds issued after the law takes effect, so existing loans are unaffected.
Supporters Say
Supporters say it makes student loans cheaper and more available by reducing bureaucratic hurdles.
Critics Say
Critics argue it could reduce funding for other state projects that also rely on tax-exempt bonds.
Supporters, including the bipartisan sponsors, see this as a straightforward way to help students without spending federal money. Critics might worry that lifting the volume cap for student loan bonds could crowd out bonds for infrastructure or other public needs, though the bill doesn't increase the overall cap – it just adds an exemption.