President Donald Trump said on Oct. 25 that he might support a bill to cap interest on federal student loans at 2.5%, a statement that injects new momentum into ongoing congressional efforts to cut borrowing costs for students.
What was said and who responded
Rep. Anna Paulina Luna (R-Fla.) posted a video of the president and declared that he will back a 2.5% cap. Luna framed the policy as a long-standing priority in Congress and tied it to workforce competitiveness.
“President Trump said he will support capping federal student loan interest rates at 2.5%! This has been an issue that I’ve long championed in Congress,” said Rep. Anna Paulina Luna.
Where this fits in current legislation
The idea is not new. Republican and Democratic lawmakers have proposed separate measures to reduce or eliminate interest on federal loans. Rep. Michael Lawler (R-N.Y.) introduced the Affordable Loans for Students bill in March 2025 to cut rates to 2%; that proposal currently remains in the House Committee on Education and the Workforce. On the Democratic side, Rep. Joe Courtney (D-Conn.) and Sen. Peter Welch (D-Vt.) reintroduced the Student Loan Interest Elimination Act on March 24, 2026, which would let borrowers refinance current and future federal loans at 0%.
“At a time when Americans are experiencing a cost-of-living crisis, student loan repayment with interest adds a crushing burden to millions of middle-class student loan borrowers,” Rep. Joe Courtney said in a statement.
Who would be affected
The comment arrives against a backdrop of federal portfolio data. In June the Department of Education reported that 42.6 million people held federal student loans totaling $1.7 trillion. The department also reported that, as of March 2026, about 9 million borrowers were in default on roughly $220 billion of loans.
Interest rates for federal loans issued in recent years vary by loan type and currently run from 6.52% to 9.07%. A statutory cap or a move to zero interest would alter the interest burden for borrowers who hold loans at those rates and for future borrowers.
Political and practical next steps
- Any change to federal student loan interest rates would require legislative action or administrative authority tied to existing programs.
- Several congressional proposals — including Lawler’s 2% bill and Courtney and Welch’s interest-elimination plan — remain pending.
- Republican and Democratic bills differ on the scale and mechanism of relief, from a modest rate cap to full interest elimination.
Trump’s statement does not set a legislative timetable. It does, however, signal possible White House receptivity to rate-lowering legislation as lawmakers head into a midterm election period where student debt remains a potent campaign issue.
| Item | Figure |
|---|---|
| People with federal student loans | 42.6 million |
| Total federal student loan debt | $1.7 trillion |
| Borrowers in default (as of March 2026) | 9 million borrowers, $220 billion |
| Recent federal loan interest rates | 6.52% to 9.07% |
Members of both parties have floated rate cuts or elimination as remedies for the financial strain on borrowers. Whether a White House signal translates into concrete legislation will depend on congressional negotiations and on the contours of any bill that reaches the floor.
