Federal News
Congress Reintroduces Student Loan Interest Elimination Act
March 25, 2026
Congressman Joe Courtney and Senator Peter Welch have reintroduced the Student Loan Interest Elimination Act, proposing to eliminate interest on all current and future federal student loans. The legislation aims to provide relief to nearly 43 million borrowers by refinancing existing loans to zero percent interest and capping future rates, while maintaining a budget-neutral approach through the creation of a Trust Fund to offset costs. This initiative could significantly impact federal student loan servicing and management, with potential changes to contract requirements and financial administration within the Department of Education.
- Procurement professionals should anticipate potential adjustments in federal student loan servicing contracts as the legislation progresses.
- Contractors involved in loan management and financial services may see evolving requirements or opportunities related to interest rate restructuring.
- Agencies and vendors should evaluate the implications of a budget-neutral Trust Fund mechanism on funding flows and contract performance.
- This legislative effort signals a possible shift in federal student loan policy that could affect future procurement planning and contract scopes within the education finance sector.
Eliminating interest rates on all federal student loans and capping future interest rates is an essential step in making affordable college education a reality for students in Vermont, Connecticut, and across the country.
— Senator Peter Welch
The Student Interest Elimination Act provides a budget neutral solution to this problem by eliminating all interest payments to the government with a mechanism to ensure that taxpayers will not bear the cost of this reform.
— Representative Joe Courtney
Agencies
U.S. Senate, U.S. House of Representatives, Department of Education, House Education and Workforce Committee