WASHINGTON — Congressman James Moylan is co-leading bipartisan legislation that would cap interest rates on federal student loans at 2 percent, a move backers say would reduce long-term debt burdens for borrowers in Guam and across the country.
Moylan introduced the measure alongside Rep. Mike Thompson of California. The bill would set a fixed 2 percent interest rate on all new federal student loans and reduce rates on existing federal loans above that level. Borrowers with existing loans could opt out and retain their current terms if they prefer.
Moylan framed the legislation as a complement to the in-state tuition bill the House passed earlier the same day, saying affordability does not end at enrollment.
“Higher education should open doors to opportunity, not create decades of financial strain,” Moylan said. “For many students and families, the biggest barrier to opportunity is not getting into college, it’s the cost of paying back the loans afterward. Capping federal student loan interest rates at 2 percent is a practical step that helps borrowers reduce long-term costs, pay down their principal faster, and build financial stability.”
Thompson said high interest rates, not just loan balances, are driving borrower hardship.
“Too many Americans are doing everything right only to see their balances grow because of high interest rates,” Thompson said. “By lowering interest rates to 2 percent and locking them in for the life of the loan, we help borrowers pay down their principal faster, reduce long-term costs, and finally make real progress toward financial stability.”
Supporters argue the approach offers relief without the fiscal exposure of broad loan forgiveness, targeting interest accumulation rather than canceling principal balances.
