I 
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 Representa-
tives 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 
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(2) by inserting ‘‘; and (3) to make loans under 
section 460A(b)’’ after ‘‘section 459A’’. 
SEC. 3. PROGRAM FOR THE LOAN MODIFICATION OF ELIGI-
BLE FEDERAL LOANS HELD BY THE SEC-
RETARY, AND REFINANCING OF OTHER FED-
ERAL 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 Sec-
retary, 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. 
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‘‘(b) REFINANCING ELIGIBLE FEDERAL LOANS NOT 
HELD BY THE SECRETARY AS FEDERAL DIRECT CON-
SOLIDATION LOANS.— 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish 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 sub-
section, 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 
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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 Con-
solidation 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 forgive-
ness or other benefits available to the bor-
rower under the loan before refinancing 
under this subsection, in any case where 
such benefits are more generous than pro-
vided under a Federal Direct Consolidation 
Loan; and 
‘‘(ii) as otherwise provided in this sub-
section. 
‘‘(B) NO
ORIGINATION
FEES.—Notwith-
standing section 455(c), the Secretary may not 
charge a borrower of a loan made under this 
subsection an origination fee for such loan. 
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into a single consolidation loan under this 
section. 
‘‘(c) REPORT.—Not later than 180 days after the sec-
ond July 1 after the date of enactment of the Affordable 
Loans for Students Act, and on an annual basis there-
after, the Secretary shall submit a report to the author-
izing 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 de-
linquent 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 guaran-
teed 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 
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‘‘(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 Consoli-
dation Loan made under subsection (b), means a 
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loan for which a borrower’s liability is discharged by 
such Federal Direct Consolidation Loan.’’. 
(d) CONFORMING AMENDMENTS.—The Higher Edu-
cation 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 ob-
taining a Federal Direct Consoli-
dation 
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 AF-
FORDABLE 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’’; 
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(2) in subparagraph (A), by inserting ‘‘and be-
fore 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 be-
fore 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 be-
fore 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 be-
fore 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 sub-
paragraph (G); and 
(7) by inserting after subparagraph (E) the fol-
lowing: 
‘‘(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 subpara-
graphs of this paragraph, for Federal Direct 
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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 ap-
plication 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 prin-
cipal balance of the loan.’’. 
Æ 
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