Congress Plans Major Cuts to Student Loan Interest Rates

A bipartisan proposal in Congress, titled the Affordable Loans For Students Act, aims to reduce federal student loan interest rates from 9% to 2%. Introduced by representatives from both parties, the bill seeks to automatically refinance existing loans to the new lower rate, benefiting all federal student loans. Meanwhile, the student loan system faces turmoil as legal challenges have halted the Saving on a Valuable Education (SAVE) plan, impacting millions of borrowers and delaying progress toward Public Service Loan Forgiveness (PSLF). With the Education Department suspending online Income-Driven Repayment applications, borrowers are advised to document communications and explore alternative repayment plans. Additionally, discussions are ongoing about the potential restructuring of the Department of Education and its impact on federal student loans. As students prepare for college, clarity on financial aid and loan options remains crucial amid these changes.