119-hr2003

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2003 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 2003

To amend the Higher Education Act of 1965 to lower the interest rate on 
 Federal student loans to 2 percent.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 March 10, 2025

 Mr. Lawler (for himself, Mrs. Luna, and Mr. Moskowitz) introduced the 
 following bill; which was referred to the Committee on Education and 
 Workforce

_______________________________________________________________________

 A BILL

To amend the Higher Education Act of 1965 to lower the interest rate on 
 Federal student loans to 2 percent.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Affordable Loans for Students Act''.

SEC. 2. PROGRAM AUTHORITY.

 

Section 451

    (a) of the Higher Education Act of 1965 (20 U.S.C. 
1087a

    (a) ) is amended--

    (1) by striking ``and

    (2) '' and inserting ``

    (2) ''; and

    (2) by inserting ``; and

    (3) to make loans under 

section 460A

    (b) '' after ``

section 459A''.

SEC. 3. PROGRAM FOR THE LOAN MODIFICATION OF ELIGIBLE FEDERAL LOANS 
 HELD BY THE SECRETARY, AND REFINANCING OF OTHER FEDERAL 
 STUDENT LOANS.

    (a) Loan Modification and Refinancing.--Part D of title IV of the 
Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) is amended by 
adding at the end the following:

``

SEC. 460A. PROGRAM FOR THE LOAN MODIFICATION OF ELIGIBLE FEDERAL 
 LOANS HELD BY THE SECRETARY, AND REFINANCING OF OTHER 
 FEDERAL STUDENT LOANS.

 ``

    (a) Federal Direct Loan Modification.--The Secretary shall 
establish and implement, with respect to each borrower of an eligible 
Federal loans held by the Secretary, procedures to modify, without any 
action from the borrower, the terms of such loan so that beginning on 
the first July 1 after the date of enactment of the Affordable Loans 
for Students Act, the applicable rate of interest shall be 2.0 percent 
on the unpaid principal balance of the loan.
 ``

    (b) Refinancing Eligible Federal Loans Not Held by the Secretary 
as Federal Direct Consolidation Loans.--
 ``

    (1) In general.--The Secretary shall establish and 
 implement, with respect to each borrower of an eligible Federal 
 loan not held by the Secretary, procedures to refinance such 
 loan in accordance with the requirements of paragraph

    (2) and 
 without any action from the borrower, except that such borrower 
 may opt out of such procedures with respect to such loan.
 ``

    (2) Procedures.--In refinancing an eligible Federal loan 
 not held by the Secretary with respect to a borrower of such 
 loan, the Secretary shall carry out the following:
 ``
        (A) The Secretary shall make a Federal Direct 
 Consolidation Loan under this subsection, in an amount 
 equal to the sum of the unpaid principal, accrued 
 unpaid interest, and late charges of the eligible 
 Federal loan not held by the Secretary.
 ``
        (B) The Secretary shall pay the proceeds of such 
 Federal Direct Consolidation Loan to the holder of the 
 eligible Federal non-direct loan, in order to discharge 
 the borrower from any remaining obligation with respect 
 to such eligible Federal loan not held by the 
 Secretary.
 ``

    (3) Terms and conditions of refinanced loans.--
 ``
        (A) In general.--A Federal Direct Consolidation 
 Loan made under this subsection shall have the same 
 terms and conditions as a Federal Direct Consolidation 
 Loan that was not made under this subsection, except--
 ``
            (i) that the Secretary may adjust such 
 terms and conditions as necessary to enable the 
 borrower to access loan forgiveness or other 
 benefits available to the borrower under the 
 loan before refinancing under this subsection, 
 in any case where such benefits are more 
 generous than provided under a Federal Direct 
 Consolidation Loan; and
 ``
            (ii) as otherwise provided in this 
 subsection.
 ``
        (B) No origination fees.--Notwithstanding 

section 455
            (c) , the Secretary may not charge a borrower of a 
 loan made under this subsection an origination fee for 
 such loan.
 ``
            (C) Interest rate.--The applicable rate of 
 interest for a loan made under this subsection shall be 
 2.0 percent on the unpaid principal balance of the 
 loan.
 ``
            (D) No automatic extension of repayment period.--
 A loan made under this subsection shall not result in 
 the extension of the duration of the repayment period 
 of the original loan, and the borrower shall retain the 
 same repayment term that was in effect on the original 
 loan. Nothing in this paragraph shall be construed to 
 prevent a borrower from electing a different repayment 
 plan at any time in accordance with 

section 455
            (d) (3) .
 ``
        (E) Rule of construction.--Nothing in this 
 section shall be construed to--
 ``
            (i) prohibit a borrower of an eligible 
 Federal loan not held by the Secretary from 
 consolidating such a loan with any other loan 
 eligible for consolidation under this section 
 into a single consolidation loan under this 
 section; or
 ``
            (ii) require such a borrower to 
 consolidate any such loan with any other loan 
 eligible for consolidation under this section 
 into a single consolidation loan under this 
 section.
 ``
            (c) Report.--Not later than 180 days after the second July 1 
after the date of enactment of the Affordable Loans for Students Act, 
and on an annual basis thereafter, the Secretary shall submit a report 
to the authorizing committees that includes--
 ``

    (1) the total number of borrowers whose loans have been 
 modified or refinanced under this section during the preceding 
 year; and
 ``

    (2) the number of such borrowers who are delinquent in 
 making payments on such a loan.
 ``
            (d) === Definitions. ===
-In this section:
 ``

    (1) Eligible federal loan held by the secretary.--The 
 term `eligible Federal loan held by the Secretary' means--
 ``
        (A) any loan made under this part, and first 
 disbursed before the first July 1 after the date of 
 enactment of the Affordable Loans for Students Act;
 ``
        (B) any loan made, insured, or guaranteed under 
 part B, and which is held by the Secretary;
 ``
            (C) any loan made under part E, and which is held 
 by the Secretary; and
 ``
            (D) any loan made under subpart I of part A of 
 title VII of the Public Health Service Act (42 U.S.C. 
 292 et seq.), and which is held by the Secretary.
 ``

    (2) Eligible federal loan not held by the secretary.--The 
 term `eligible Federal loan not held by the Secretary' means 
 any loan--
 ``
        (A) made, insured, or guaranteed under part B, 
 and which is not held by the Secretary;
 ``
        (B) made under part E, and which is not held by 
 the Secretary; and
 ``
            (C) made under--
 ``
            (i) subpart I of part A of title VII of 
 the Public Health Service Act (42 U.S.C. 292 et 
 seq.), and which is not held by the Secretary;
 ``
            (ii) subpart II of part A of title VII of 
 the Public Health Service Act (42 U.S.C. 292q 
 et seq.); or
 ``
            (iii) part E of title VIII of the Public 
 Health Service Act (42 U.S.C. 297a et seq.).
 ``

    (3) Original loan.--The term `original loan', used with 
 respect to a Federal Direct Consolidation Loan made under 
 subsection

    (b) , means a loan for which a borrower's liability 
 is discharged by such Federal Direct Consolidation Loan.''.
            (d) Conforming Amendments.--The Higher Education Act of 1965 (20 
U.S.C. 1001 et seq.) is amended--

    (1) in 

section 428C

    (a)

    (3)
        (B)
            (i) 
            (V) (20 U.S.C. 1078-
 3

    (3)
        (B)
            (i) 
            (V) )--
        (A) by striking the period at the end of item
            (cc) and inserting a semicolon;
        (B) by striking the period at the end of item
            (dd) and inserting ``; or''; and
            (C) by adding at the end the following:
 ``

    (ee) for the purpose of 
 obtaining a Federal Direct 
 Consolidation Loan under 
 

section 460A

    (b) .''.

SEC. 4. APPLICABLE RATES OF INTEREST FOR LOANS MADE ON OR AFTER THE 
 FIRST JULY 1 AFTER THE DATE OF ENACTMENT OF THE 
 AFFORDABLE LOANS FOR STUDENTS ACT.

 

Section 455

    (b)

    (8) of the Higher Education Act of 1965 (20 U.S.C. 
1087e

    (b)

    (8) ) is amended--

    (1) in the paragraph heading, by inserting ``and before the 
 first july 1 after the date of enactment of the affordable 
 loans for students act '' after ``July 1, 2013'';

    (2) in subparagraph
        (A) , by inserting ``and before the 
 first July 1 after the date of enactment of the Affordable 
 Loans for Students Act'' after ``July 1, 2013'';

    (3) in subparagraph
        (B) , by inserting ``and before the 
 first July 1 after the date of enactment of the Affordable 
 Loans for Students Act'' after ``July 1, 2013'';

    (4) in subparagraph
            (C) , by inserting ``and before the 
 first July 1 after the date of enactment of the Affordable 
 Loans for Students Act'' after ``July 1, 2013'';

    (5) in subparagraph
            (D) , by inserting ``and before the 
 first July 1 after the date of enactment of the Affordable 
 Loans for Students Act'' after ``July 1, 2013'';

    (6) by redesignating subparagraph
        (F) as subparagraph
        (G) ; 
 and

    (7) by inserting after subparagraph
        (E) the following:
 ``
        (F) New loans on or after the first july 1 after 
 the date of enactment of the affordable loans for 
 students act.--Notwithstanding the preceding 
 subparagraphs of this paragraph, for Federal Direct 
 Stafford Loans, Federal Direct Unsubsidized Stafford 
 Loans, Federal Direct PLUS Loans, and Federal Direct 
 Consolidation Loans for which the first disbursement is 
 made, or the application is received, on or after the 
 first July 1 after the date of enactment of the 
 Affordable Loans for Students Act, the applicable rate 
 of interest shall be 2.0 percent on the unpaid 
 principal balance of the loan.''.
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