Democrats’ victory in the midterm elections could revive a series of stalled student loan proposals. The proposals range from an initiative to eliminate interest on federal loans to policies that would make it easier for struggling borrowers to avoid default. Democrats won control of both chambers on Tuesday, with the new Congress to take office in January.
But winning congressional control does not mean Democrats can simply reverse President Donald Trump’s student loan agenda. Trump remains in the White House, so legislation passed by Democrats could still face a presidential veto, and his administration remains in effect at the Department of Education. But lawmakers already have several proposals that Democrats could pursue now that they have more power.
Trump still controls the Education Department and can veto legislation. Democrats can investigate, negotiate funding, and force votes. That's leverage, but it doesn't automatically change anyone's monthly bill.” Federal student loan policy was dramatically reshaped under the Republican-controlled government through the One Big Beautiful Bill Act, including changes to repayment plans and borrowing options.
But Democratic control of Congress could shift the debate, even if Trump prevents lawmakers from enacting their most ambitious proposals. A Democratic Congress can advance bills, negotiate spending legislation and conduct more stringent oversight of the Education Department. But legislation would still have to clear Congress and either receive Trump’s signature or muster enough support to override a veto.
Newsweek compiled a list of the four proposals borrowers could hear more about next year. One of the most ambitious proposals already sitting in Congress is the Student Loan Interest Elimination Act, which was introduced by Democratic Representative Joe Courtney of Connecticut and Democratic Senator Peter Welch of Vermont. The House bill, H.R. 8045, was introduced on March 24, while Welch introduced the Senate companion, S. 4169, the same day.
The legislation goes considerably further than simply lowering rates. It would eliminate interest on federal student loans and establish an Education Affordability Trust Fund while changing federal student loan limits. The proposal includes options for modifying eligible federal Direct Loans and refinancing other federal student loans.
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