Student Loan Interest Rates Could Be Cut for Millions of Americans

A bipartisan proposal in Congress could cut interest rates on federal student loans from the 9- to 6-percent rate that most borrowers have today, to 2 percent.

The bill was introduced in March 2025 by New York Representative Mike Lawler and Florida Representative Anna Paulina Luna, both Republicans, and Florida Representative Jared Moskowitz, a Democrat.

Newsweek has reached out to press representatives for Lawler, Moskowitz and Luna via email for comment.

Why It Matters

Former President Joe Biden's reforms to student loan debt and forgiveness came under intense scrutiny from Republicans. His plan allowed the Department of Education to approve some $180 billion in student loan debt forgiveness.

As of June 2024, Americans owed approximately $1.6 trillion in student loan debt, according to the Pew Research Center.

What To Know

The bill is officially titled the Affordable Loans For Students Act and marks a moment of bipartisanship on an issue known for being divisive.

"We've giving borrowers the flexibility they need to pay off their debt without unnecessary obstacles," Lawler said in a press release.

If it were passed by Congress, the legislation would adjust interest rates on existing federal student loans down to 2 percent.

It would apply to all federal student loans, including undergraduate, graduate and federal consolidation loans. The cap would also apply retrospectively, and would automatically refinance borrowers' loans to the new rate, there would be no need for individuals to opt in.

"This legislation caps and ends excessive interest rates, expanding access to college degrees and making American workers even more competitive in the modern workforce," Luna said in a press release.

The bill has been supported by the National Association of Student Financial Aid Administrations, who said it was an "equitable approach that would help ease the burden of student loan debt on current and future borrowers."

What People Are Saying

Representative Mike Lawler, in a press release: "This is a game-changer for millions of Americans looking to build a better future without the weight of overwhelming student loan debt holding them back."

Representative Anna Paulina Luna said: "High interest rates add years, sometimes even decades, to the time it takes for student loans to be paid off. This is unacceptable."

Representative Jared Moskowitz in a press release: "Hardworking Americans shouldn't be saddled with more student loan debt than what they took out just because of interest rates—but that's what many Floridians who took out loans face, sometimes decades after they went to school."

What's Next

At present, the future of the bill is unclear, and it may face opposition from some areas of government. Cutting the interest rate would mean a significant cost being created for the federal government due to it losing revenue from repayments, something that might cause pushback.