WASHINGTON, DC – Pennsylvania U.S. Senator John Fetterman today joined his colleagues Senator Peter Welch (D-VT) and Representative Joe Courtney (D-CT-2) on legislation to lower the student loan burden on current borrowers by eliminating interest on federal student loans and capping interest rates for future borrowers.
“Pennsylvania has the third highest rate of student loan debt in the nation. If we can spend trillions bailing out big banks and their CEOs who crashed our economy, we can surely prevent borrowers from accumulating more debt for simply getting an education,” said Senator Fetterman. “This legislation will be a huge relief to working people in Pennsylvania and across the country.”
The Student Loan Interest Elimination Act would refinance the interest on federal student loans for all existing borrowers to zero percent and cap interest rates for future borrowers. The interest rates for future student loan borrowers would be based on a sliding scale determined by financial need, with no student having an interest rate greater than four percent. This sliding scale would disincentivize students from taking out loans they don’t need. This legislation would also establish a Trust Fund to pay for the student loan program’s administrative expenses that are currently covered by the interest paid by borrowers.
More than 43 million Americans have federal student loan debt, including more than 1.8 million Pennsylvanians who owe a collective $66.5 billion. Payments were paused during the COVID-19 pandemic but resumed in October of this year. This bill would allow the millions of Americans with existing federally held student loans to see their interest rates immediately eliminated.
A fact sheet on the bill is available here.