Donald Trump Considers Capping Student Loan Interest at 2.5%
President Donald Trump indicated he may support legislation to cap federal student loan interest rates at 2.5 percent to reduce borrower burdens.
Donald Trump stated on October 24 that he might support legislation to cap federal student loan interest rates at 2.5 percent. This proposed cap would significantly lower current rates for newer federal loans, which range from 6.52 percent to 9.07 percent.
The president's position follows legislative efforts by Republicans, including Representative Anna Paulina Luna, who introduced a resolution to lower rates to 2 percent, and Representative Michael Lawler, who introduced the Affordable Loans for Students bill in March 2025 with a similar 2 percent target.
Democrats have proposed a more aggressive approach. Representative Joe Courtney and Senator Peter Welch reintroduced the Student Loan Interest Elimination Act on March 24, which seeks to eliminate interest on federal loans entirely.
According to the United States Department of Education, 42.6 million people hold $1.7 trillion in federal student loans, with approximately 9 million borrowers in default as of March 2026. The Trump administration has previously addressed student debt through repayment plans under the One Big Beautiful Bill Act.
