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119-hr-8045119th CongressWALLET

Student Loan Interest Elimination Act

Sponsored By: Representative Courtney, Joe [D-CT-2]

Introduced

Summary

Creates an Education Affordability Trust Fund that channels federal student loan repayments into an investment pool to fund lower-cost loans, Pell supplements, and college affordability grants. It also rewrites loan rules to expand refinancing and cut accruing interest for many federal borrowers while setting inflation-linked loan limits starting in 2027.

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  • Students and borrowers: Expands refinancing and loan modification options and eliminates accruing interest on specified federal loans for new loans starting July 1, 2026. Inflation-adjusted annual and aggregate loan limits begin in 2027.
  • Low-cost colleges and Pell recipients: Excess Trust Fund earnings can pay for a Supplemental Federal Pell Grant Program and competitive Postsecondary Student Success Program grants to qualifying institutions. Grants range from $600,000 to $1,000,000 and an institution with an endowment above $100 million is generally ineligible.
  • Governance and financial rules: A six-member presidentially appointed board with strict ethics will manage investments under conservative bond, credit, and diversification rules. Transfers to the Education Department are tiered by assets with no transfers under $300 million and up to 100% transfer once assets hit $500 million.

*Trust Fund earnings must be calculated on an accrual basis for federal budget laws.*

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 0 costs, 1 mixed.

Education Trust Fund and grants

If enacted, the bill would create an Education Affordability Trust Fund to receive all Title IV loan repayments without further appropriation. A six‑member Board would manage investments, with initial appointments due within 90 days. The fund would follow strict credit and diversification rules and favor bonds under 10 years for 10 years. Transfers to the Education Department would follow 180‑day asset tiers: 100% at $500 million or more, 40% at $400–$499,999,999, 10% at $300–$399,999,999, and 0% below $300 million. Excess returns after administrative costs could be used for Supplemental Pell Grants and competitive Postsecondary Student Success Program grants of $600,000–$1,000,000.

Lower student loan interest and refinance

If enacted, you would stop accruing interest on eligible Federal Direct Loans starting July 1, 2026 unless you opt out. Loans first disbursed or applied for on or after July 1, 2026 for certain types would have a 0% interest rate. The Education Department would be able to refinance eligible non‑federal loans into a Federal Direct Consolidation Loan with no origination fee and no interest accrual; you could opt out of refinancing at any time. The bill would also end most new interest‑subsidized Stafford loans after June 30, 2026 and adjust unsubsidized loan amounts to reflect that change.

Loan limits rise with inflation

If enacted, federal annual and aggregate student loan limits would be indexed to inflation for instruction periods beginning on or after July 1, 2027. The Education Secretary would increase statutory loan amounts each year by the estimated percentage change in the Consumer Price Index. This would raise the yearly and total federal borrowing caps over time.

Sponsors & CoSponsors

Sponsor

Courtney, Joe [D-CT-2]

CT • D

Cosponsors

  • Del. Norton, Eleanor Holmes [D-DC-At Large]

    DC • D

    Sponsored 3/24/2026

  • Rep. Evans, Dwight [D-PA-3]

    PA • D

    Sponsored 4/22/2026

  • Rep. Lieu, Ted [D-CA-36]

    CA • D

    Sponsored 4/22/2026

  • Rep. Levin, Mike [D-CA-49]

    CA • D

    Sponsored 4/27/2026

  • Rep. Pingree, Chellie [D-ME-1]

    ME • D

    Sponsored 6/18/2026

  • Rep. Scott, Robert C. "Bobby" [D-VA-3]

    VA • D

    Sponsored 7/9/2026

  • Rep. Wilson, Frederica S. [D-FL-24]

    FL • D

    Sponsored 7/14/2026

  • Rep. Figures, Shomari [D-AL-2]

    AL • D

    Sponsored 7/20/2026

Roll Call Votes

No roll call votes available for this bill.

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