Congressman Moylan Co-leads Bipartisan Bill to Cap Federal Student Loan Interest Rates At 2 Percent

(Washington, D.C.)- Congressman James Moylan is co-leading bipartisan legislation with Congressman Mike Thompson (CA-04) to set the interest rate for all new federal student loans at a fixed 2 percent and reduce interest rates on existing federal loans above that level, providing meaningful relief for student borrowers in Guam and across the nation.

Rising college costs and high interest rates have made it increasingly difficult for many students and families to manage the long-term cost of higher education. While student loan balances are often the focus of national debate, high interest rates are a major driver of long-term borrower distress, increasing repayment burdens and keeping borrowers in debt for years or even decades.

The legislation addresses this challenge by establishing a fixed 2 percent interest rate for all new federal student loans. For borrowers with existing federal loans carrying higher rates, the bill would reduce those rates to 2 percent as well, while allowing borrowers to opt out and retain their current loan terms if they prefer.

"Higher education should open doors to opportunity, not create decades of financial strain. For many students and families, the biggest barrier to opportunity is not getting into college-it's the cost of paying back the loans afterward," said Congressman Moylan."Capping federal student loan interest rates at 2 percent is a practical step that helps borrowers reduce long-term costs, pay down their principal faster, and build financial stability. This bipartisan bill helps ensure that higher education remains a pathway to opportunity, not a lifetime of debt."

By lowering interest rates rather than forgiving principal balances, the proposal offers a practical solution to help borrowers manage their loans while avoiding disproportionate costs to taxpayers.

"Too many Americans are doing everything right only to see their balances grow because of high interest rates," said Congressman Thompson. "This bill is a simple, targeted fix. By lowering interest rates to 2 percent and locking them in for the life of the loan, we help borrowers pay down their principal faster, reduce long-term costs, and finally make real progress toward financial stability."

The measure is intended to simplify repayment, reduce the risk of loan default, and help students and families better plan for the long-term cost of higher education.

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