S. 4169 · Where this bill is now
In committee
Introduced in the Senate, Mar 24, 2026
What this bill does
In plain words · AI-written from the official summaryEliminates interest on federal student loans
This bill would stop interest from building up on federal student loans. Starting July 1, 2026, existing federal student loans would accrue zero interest, and borrowers could choose to opt out if they wanted to. The bill would also refinance other types of federal loans (like older Federal Family Education Loans and Perkins Loans) at zero interest. New federal student loans issued after that date would have a 0% interest rate from the start.
How it affects you
If you have federal student loans, this would directly change your payments and payoff timeline since you'd no longer owe interest charges. People with older federal student loans that aren't Direct Loans would see their loans refinanced into the zero-interest program. Student loan borrowers would have the choice to stay in the current system if they prefer, and future borrowers would never pay interest on new federal loans taken out after July 1, 2026.
Read the official summary (Introduced in Senate, Mar 24, 2026)
Student Loan Interest Elimination Act
This bill eliminates interest on existing and new federal student loans beginning on July 1, 2026.
Specifically, for existing federal student loans, the bill directs the Department of Education (ED) to establish and implement procedures to (1) modify the terms of Federal Direct Loans so that beginning on July 1, 2026, no interest shall accrue on such a loan; and (2) allow a borrower to opt out of this loan modification.
Additionally, ED must establish and implement procedures to (1) refinance eligible loans that are not Federal Direct Loans (e.g., privately held Federal Family Education Loans and Perkins Loans), and (2) allow a borrower to opt out of this loan refinancing. The bill outlines the terms and conditions of these refinanced loans, including by prohibiting ED from charging origination fees and specifying that no interest shall accrue on these loans.
For new federal student loans made on or after July 1, 2026, the bill sets the applicable interest rate at 0%.
The bill establishes the Education Affordability Trust Fund. ED must deposit all payments made on federal student loans into this trust fund. The Education Affordability Trust Fund Board, as established by this bill, must transfer the assets from investments of this trust fund to ED to pay for the administrative costs of carrying out federal student loan programs.
The bill allows ED to use excess amounts of funds in the trust fund to carry out a Supplemental Pell Grant Program.
Written by AI (Claude) using only the official summary by the Congressional Research Service, the Library of Congress’s nonpartisan research staff. It can miss nuance, so check the official summary and the bill text for details.
2nd SessionS. 4169
A BILL
Student Loan Interest Elimination Act
Sponsor: Sen. Peter Welch (D-VT) · Introduced Mar 24, 2026 · Education · 1 version of the text
Sources: Congress.gov actions and votes · bill text from GovInfo · latest official action Mar 24, 2026: “Read twice and referred to the Committee on Health, Education, Labor, and Pensions.”