To amend the Higher Education Act of 1965 to eliminate interest on student loans, establish the Education Affordability Trust Fund, increase annual and aggregate loan limits, and for other purposes.

The Student Loan Interest Elimination Act proposes to eliminate interest on all current and future federal student loans. For existing borrowers, the bill would automatically refinance their loans to a zero percent interest rate. For future borrowers, interest rates would be set on a sliding scale based on financial need, with the vast majority receiving a zero percent rate and no borrower exceeding a four percent cap. The legislation aims to ensure that the federal government does not profit from student lending while reducing the long-term debt burden on millions of Americans.

To offset the loss of interest revenue, the bill would establish the Education Affordability Trust Fund. Under this system, student loan principal payments would be deposited into the fund and invested in various bonds. The returns from these investments would be used to cover the administrative costs of the federal student loan program, making the reform budget-neutral. Any excess revenue generated by the trust fund would be directed toward increasing Pell Grant awards and providing grants to colleges that successfully limit tuition increases, further incentivizing affordability in higher education.