Lowering Student Loans Act

This bill would amend the Higher Education Act of 1965 to set interest rates for Federal student loans made on or after July 1, 2026, at 2 percent. The bill would establish a fixed 2 percent interest rate for all new Federal Direct Loans issued on or after July 1, 2026, including Stafford, Unsubsidized Stafford, PLUS, and Direct Consolidation Loans. It would also automatically reduce the interest rate to 2 percent for existing Direct Loans currently carrying higher rates, with the 2 percent rate remaining fixed for the life of the loan. Additionally, borrowers with certain older Federal Family Education Loan (FFEL) Program loans would have the option to consolidate into the Direct Loan program to access the lower 2 percent rate. The legislation does not change repayment plans, forgiveness programs, or borrower protections and is narrowly focused on reducing interest-driven balance growth so borrowers can pay down principal faster and reduce long-term repayment costs. The bill is currently under consideration by the House Committee on Education and Workforce and has not yet been voted on by the full chamber.