Anna Paulina Luna, Jared Moskowitz file bipartisan bill to cap student loan interest rates

Republican U.S. Rep. Anna Paulina Luna and Democratic U.S. Rep. Jared Moskowitz are teaming up to improve student loan affordability.

The pair just filed legislation to establish a 3% limit on the interest rate of federal student loans.

It’s called the Student Loan Interest Cap Act.

“Millions of students go into high debt every year to be able to afford to go to college. Meanwhile, universities keep raising their tuition costs because they know students will just get a loan with interest rates of up to 9-10% that they will be paying their whole lives,” Luna said in a statement.

“It’s time we put a cap on those interest rates to make it easier for those students to pay their loans responsibly and not be captives to the banks that back these greedy institutions.”

Moskowitz said student loan debt is a “significant barrier for many Americans hoping to start a family, buy a house, and save for retirement.”

“I see interest rates as a simple part of the issue that Congress can tackle,” he said in a statement.

“It’s not right that people are making monthly payments year after year and still owing more than they originally borrowed. As a dad, I want our kids to pursue the education they need to make a difference in the world, not fearing that it will put them in debt forever.”

Student loans in the U.S. today total more than $1.77 trillion. It’s the second-largest type of consumer-generated debt behind mortgages, accounting for 9% of the nation’s consumer debt.

About 92% of all student loan debt is federal. The rest are private loans.

Around 43.6 million Americans hold federal student loan debt, with an average per-borrower balance of $38,000.

Luna and Moskowitz’s bill, filed Friday, follows several similarly aimed bills that failed to gain traction in Congress. Last year, U.S. Sen. Peter Welch of Vermont and U.S. Rep. Joe Courtney of Connecticut filed twin measures that among other things would have capped future interest rates on student loans at 4%. Neither received a hearing.

On Wednesday, the U.S. Supreme Court maintained a temporary pause on an effort by President Joe Biden to erase tens, and possibly hundreds, of billions of dollars in student loan debt. The Court’s decision also left uncertain millions of borrowers enrolled in the federal SAVE program, a Biden administration initiative that ties monthly payments to household size and income.

Last year, the Court rejected an earlier Biden plan that would have forgiven more than $400 billion in student loan debt.