President Donald Trump told reporters he “might” support a House bill that would cap interest rates on federal student loans at 2% for existing and future borrowers, a proposal that would immediately lower monthly payments and total interest costs if enacted.
“I might sign it,” President Donald Trump said, referring to the bill limiting federal student loan interest to 2%.
The bill was introduced last year by Reps. Anna Paulina Luna, Mike Lawler (R‑N.Y.) and Jared Moskowitz (D‑Fla.), and it would automatically lower rates for current borrowers by as much as seven percentage points and cap new federal loan rates at 2%. The measure has drawn bipartisan sponsorship in the House but has not advanced to a floor vote.
what the proposal would change
- Rate cap: New federal student loans would be capped at 2% interest; current borrowers could see their rates reduced by up to seven percentage points, according to the bill’s framework cited in coverage.
- Current rates: Federal student loan interest currently ranges roughly from 2.75% to 9.08%, depending on loan type and disbursement year.
- Department of Education measure: Separately, the Education Department is offering a temporary 1‑percentage‑point interest reduction for borrowers who resume payments and enroll in autopay through June 30, 2028.
Cutting interest would reduce both monthly payments and the total amount borrowers pay over the life of their loans because interest accrues on top of principal balances. The argument for a cap has gained attention amid rising repayment burdens and record levels of missed payments.
borrower distress and defaults
Department of Education figures cited in the reporting put the number of borrowers in default and delinquent status at historically high levels: more than 10 million borrowers were in default (payments missed for 271 days or more) and roughly 2.8 million were delinquent (31 to 270 days late), bringing the total past‑due population to the highest level on record.
The 2% cap proposal joins a series of congressional bills and advocacy proposals from recent years that would sharply reduce or eliminate interest on federal student loans; none has reached the president’s desk to become law. Any change would require congressional approval before reaching the White House for signature.
