“I’m just a bill. Yes, I’m just a bill. And I’m sitting here on Capitol Hill. Well, it’s a long, long journey to the capital. While sitting on the committee, there’s a long wait, but I know that one day it will become law.
If you’re a student loan borrower, it’s no harm in remembering these School House Rock lyrics every time you see headlines about massive forgiveness, income-driven repayments (IDRs) and more.
In 2025 so far, the Trump administration has repeatedly broken student loan news, worrying about whether it is working to forgive public service loans or borrowers who want to sign up for IDRs.
As Rep. Mike Lawler (R-NY) reminded Bankrate in an exclusive interview, “Legislation takes time.” Laurer, who introduced multiple higher education funding bills in the 2025-2026 session, said, “I think we can build a consensus on this as it will affect everyone across the country. We need a solution in the long run.”
Student loan laws under consideration
We focus on new laws (mostly introduced during current parliamentary sessions) that most impact families paying college payments and educational obligations.
1. Interest on federal loans is 2%
ACT name: Affordable loan actions for students (full text)
| It was introduced | In the committee | I passed the house | Passed the Senate | President’s desk | Sign the law |
This is a bill to look at if you are one of the federal loan borrowers and feel like you are trying to make sure your outstanding balance doesn’t shrink despite years of repayment. Originally announced as a 1% cap on federal loan interest, the bill enjoys joint sponsorships of both parties. Roller confirmed with Bankrate that the interest rate cap would be “retrospectively applied” to current lenders, not just future borrowers.
In the context, student loan rates for federal government loans currently range from 6.53% to 9.08%.
2. Closing Grade Plus Loan Program
ACT name: Graduate School Opportunities and Affordable Loan Methods (Full Text)
| It was introduced | In the committee | I passed the house | Passed the Senate | President’s desk | Sign the law |
Sen. Tommy Tuberville (R-AL) has introduced the bill in late January, aiming to limit borrowing for alumni and professional students. In addition to cancelling the Grad Plus Loan program (and ostensibly leaving the parent and loan intact), it also changes the total borrowing limit for direct unsubsidized loans.
| No direct federal subsidy, subsidized loans | Current Limitations* | Suggested Limitations** |
| graduate student | $138,500 | $65,000 |
| Professional Student | $138,500 | $130,000 |
|
*Includes faculty borrowing **In addition to undergraduate borrowing |
The Plus Loan Program could remain in the chopping block, even if Tuberville’s proposal doesn’t move forward. This is the reported subject of the Republican budget adjustment process in Congress. In any case, future graduates and those seeking professional degrees may have to resort to private student loans.
3. Provide income-driven repayments to parents and loan borrowers
ACT name: Affordable repayment options for the Parents Act 2025 (full text)
| It was introduced | In the committee | I passed the house | Passed the Senate | President’s desk | Sign the law |
Currently, federal parents and loans must be integrated (not private with the education department) to qualify for an income-driven repayment plan. Introduced by veteran MP Maxine Waters (D-CA), the bill amended the 1965 Higher Education Act (HEA) to make it an immediate option for parents who rent on behalf of their children.
According to Waters Office’s mathematics, IDR Access helps some of the 3.6 million parents and loan borrowers lower monthly membership fees with a total of $110 billion outstanding debt. It will definitely help older people who are struggling with this debt.
4. Interest-free postponement for medical, dental residents and interns
ACT name: Resident Education Deferred Interest (REDI) Act (Full Text)
| It was introduced | In the committee | I passed the house | Passed the Senate | President’s desk | Sign the law |
The Redi Act, a co-senator effort, deals with student loan borrowers who have large debts for their medical and dental careers. After that, you will see the balance balloon during your internship or residency (and before you earn a potential six-figure salary). Redi will modify the HEA to remove that possibility. If passed, the bill will postpone repayments and suspend interest accrual during internship and residency programs.
5. Expand CARES Act’s student loan repayment rebate
ACT name: Employers’ participation in the repayment law (full text)
| It was introduced | In the committee | I passed the house | Passed the Senate | President’s desk | Sign the law |
The March 2020 Care Act allows businesses to waive up to $5,250 in tax-free refunds to employees for repayment of student loans (or covering education costs), but only until 2025. This new “employer participation” bill has been introduced in both the House and Senate and aims to make it permanent by rewriting the internal revenue law. With bipartisan support among co-sponsors, the bill is a decent bet to move forward.
Don’t be confused: The Secure 2.0 Act of 2022 allowed employers to match workers’ student loan payments in the form of retirement account contributions.
6. Allow military personnel to apply GI claim benefits to federal loan repayments
ACT name: Modern GI Bill Law (Full Text)
| It was introduced | In the committee | I passed the house | Passed the Senate | President’s desk | Sign the law |
Like the above laws, the modern GI bill laws similarly strive to fold student loan repayments into existing profits. Service personnel eligible for educational assistance under the GI bill following the post-9/11 GI bill can apply assistance to federal loan payments to certain restrictions ($15,900 in 2026) for up to three years.
7. Lower the barriers to private student loan bankruptcy
ACT name: Private Student Loan Bankruptcy Fairness Act 2025 (full text)
| It was introduced | In the committee | I passed the house | Passed the Senate | President’s desk | Sign the law |
It’s easier to say than to let out the student loans being bankrupt. “Excessive difficulty” requires proving that you cannot reach zero balance without worry. The bill will completely remove that standard, at least for private student loan liabilities.
But don’t raise your hopes. “That bill won’t go anywhere,” says Joshua Cohen, a Vermont-based student loan attorney.
8. Punish schools by imposing student debts
ACT name: Preventing financial exploitation in the Higher Education Act (full text)
| It was introduced | In the committee | I passed the house | Passed the Senate | President’s desk | Sign the law |
The Trump administration is frozen grants to major universities that it believes are allowing anti-Semitism on campus. The bill also excludes financial penalties for schools that allow a high percentage of students to become delinquent or default (or “inadequate payments”) on federal loans.
For example, in the first year of implementation, the bill requires schools to pay 30% of the unpaid balance of the default student (if at least 11% of students are the default). The funds go directly to the federal government.
Once this idea has gotten steam, it can be combined with another recently introduced bill: Higher Education Reform and Opportunity Act (full text).
The history of federal student loans and financial aid
Not all federal student loan repayments are attributable to Congress. For example, in 2015, the Department of Education (DOED) created a revised salary as it acquired a repayment plan. And recently, President Biden and President Trump have used Doed Powers and Exaght orders to award forgiveness and threaten them to take away it.
Yet, with the power of the wallet, the signatures of Congress and many presidents are most directly influenced by where we are today.
