Student Loan Interest Elimination Act

Combining loans normally resets the months you have paid toward income-based forgiveness. Here that credit would carry over, weighted by how much of the new loan each old loan makes up.

Students who lose a subsidized loan could borrow that same amount as an unsubsidized loan instead. The yearly cap rises by the exact amount they would have received.

Both the yearly and lifetime caps on federal student loans would move with the Consumer Price Index, the government's measure of rising prices. The change starts with school terms beginning on or after July 1, 2027.

In years when the fund's investments earn more than the program costs, the Education Secretary could add a second Pell Grant. Each student's extra award would be sized in line with their regular one, and it would not count against the limit on how long you can get Pell.

Loans held by the government would switch to 0% on their own, starting July 1, 2026. You would not have to apply, and you could opt out later if you want your old terms back.

New unsubsidized Stafford, PLUS, and consolidation loans would be set at 0%. This covers loans first paid out on or after July 1, 2026.

Some older federal loans are held by banks or schools, like FFEL, Perkins, and health-career loans. The government would pay those off and give you a new 0% federal loan, with no fee and the same payoff date.

Subsidized loans are the ones where the government covers your interest while you are in school. No new ones could be made after June 30, 2026. All federal loans would carry 0% interest under this bill, in school and after.

An outside accountant would audit the trust fund every year. The board would send Congress a full financial report within 180 days of the fiscal year's end, and post it on the Education Department's website.

Board members could not be registered lobbyists or former members of Congress. They would also have to sell any holdings that clash with the fund's investments, or move them into a blind trust, and file financial disclosures.

New student aid rules normally go through public talks with schools, students, and lenders, and follow a set yearly calendar. The Education Secretary could waive both steps to put these changes in place faster.