A group of congressional Democrats has introduced legislation to eliminate interest rates on all current federal student loans—and cap interest rates of future loans at 4 percent. The plan further sets aside student loan payments in a trust fund, which the bill's sponsors say will allow the plan to be funded without offsetting costs onto taxpayers.
While the full text of the Student Loan Interest Elimination Act has not yet been published, a fact sheet of the bill published by Rep. Joe Courtney (D–Conn.) notes that the bill would "refinance the interest rate of all existing federal student loans to zero percent and cap interest rates for future borrowers," adding that "the interest rates for future student loan borrowers will be based on a sliding scale determined by financial need."
