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By Suzanne Blake
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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.
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But lawmakers already have several proposals that Democrats could pursue now that they have more power.
“I'd expect Democrats to push back on the 2025 borrowing limits, expand Pell Grants, and revisit repayment protections and interest rates,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek. “But borrowers expecting a return to widespread forgiveness will most likely be disappointed. 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.”
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Why It Matters
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.
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What to Know
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.
Eliminating Student Loan Interest
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.
“Some lawmakers have proposed potentially capping interest rates on student debt, an idea that may find support from this administration which has signaled willingness in the past to put limits on interest rates to help Americans struggling financially,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
“Still, student debt has been a contentious issue in the past, with some Americans seeing any attempt to alleviate it being unfair to those who didn't take out loans to fund higher education.”
Both versions have remained at the introduced and committee referral stages, meaning neither was able to advance through the Republican-controlled Congress. Democratic control could give the proposal hearings and a potential route to the floor that it did not previously have. Its biggest hurdle would then become Trump.
Cutting Federal Student Loan Rates to 2 Percent
Another proposal would dramatically reduce interest rather than eliminate it altogether.
Democratic Representative Mike Thompson of California introduced the Lowering Student Loans Act, H.R. 7810, in March. The bill would set the interest rate on covered federal student loans at 2 percent.
“Too many Americans are doing everything right only to see their balances grow because of high interest rates,” Thompson said in a statement. “This bill is a simple, targeted fix. 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.”
Significantly, the proposal would not be limited to future college students. The text provides for a 2 percent rate for certain new loans first disbursed on or after July 1, 2026, while also lowering rates on covered existing loans carrying rates above 2 percent.
The legislation was referred to the House Education and Workforce Committee and has not advanced, but a Democratic House will make committee and floor consideration considerably more realistic.
Still, a permanent 2 percent rate would still require Trump’s signature or enough votes for a veto override.
Making Public Service Loan Forgiveness Easier to Access
A third proposal could have one important advantage in a divided Washington: it already has bipartisan backing.
Democratic Representative Bill Foster of Illinois, who won reelection Tuesday, and Republican Representative Brian Fitzpatrick of Pennsylvania, who lost, introduced the Public Service Loan Forgiveness Inclusion Act of 2026, H.R. 10298, in September.
Under current law, Public Service Loan Forgiveness generally wipes away remaining Direct Loan debt after a borrower makes 120 qualifying payments while meeting the program’s public-service employment requirements.
But Foster and Fitzpatrick’s bill would broaden what counts during the beginning of that period. For the first 60 monthly payments, payments made under a wider group of federal repayment plans could qualify.
It would also allow certain payments that would otherwise have been made during an administrative forbearance to count when a borrower was working in a public service job.
Automatically Helping Delinquent Borrowers Find Cheaper Payments
Democrats could also focus on the growing problem of student loan delinquency and default.
Democratic Representative Suzanne Bonamici of Oregon introduced the SIMPLE Act, H.R. 10220, on September 2. It would require new notifications and create an automatic-enrollment process for some federal student loan borrowers who fall behind.
Specifically, borrowers who become at least 31 days delinquent would be notified about their delinquency, repayment options and estimated monthly payments.
If a borrower reached 75 days delinquent without choosing a new plan, the Education Department could automatically place the borrower into an eligible income-driven repayment plan offering the lowest monthly payment, assuming that plan would reduce the borrower's bill.
“Student loans have long been a financial burden for millions of Americans, and with the expiration of some federal government programs that offered smaller repayment amounts and additional forgiveness options, many are currently feeling the effects of higher monthly payments,” Beene said.
Whether Trump would accept the proposal is uncertain, particularly when it intersects with the administration’s preferred repayment framework. But the bill targets loan administration and delinquency rather than cancelling balances outright, so that could leave more room for negotiation.
What About Broad Student Loan Forgiveness?
Borrowers should generally not assume that the Democratic midterm victory will usher in another Biden-style attempt at mass student loan cancellation.
The U.S. Supreme Court struck down the Biden administration program that would have provided as much as $10,000 in cancellation for qualifying borrowers, or as much as $20,000 for qualifying Pell Grant recipients.
Still, there are active Democratic bills focused on interest, refinancing and delinquency protections.
“I do see Democrats working to reverse some of the orders put in place by Trump, specifically regarding repayment and changes to student loan forgiveness policies,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. “I also see reforms aimed at making student loans easier to access, along with legislation surrounding school choice among the states.”
Could Any of These Bills Actually Become Law?
Winning Congress gives Democrats control over legislation and considerably more influence over student loan policy. But it does not give them control of the executive branch.
Trump can veto legislation passed by Congress, and Democrats would need two-thirds support in both chambers to override the veto. Without that level of support, the most ambitious changes would require some degree of negotiation with the White House and congressional Republicans.
“We must understand that the executive branch has legitimate veto power to quash any reform it doesn’t deem beneficial,” Thompson said. “Getting legislation through may require a two-thirds vote in both the House and Senate to override a presidential veto, which Democrats currently don’t have.”
What Happens Next
The current Congress will be in place for the rest of the year, while the newly elected Congress will take office in January. At that point, Democrats can decide which stalled student loan proposals receive hearings and floor consideration.
“I would expect gridlock in this regard and plenty of concessions to get any meaningful legislation through,” Thompson said. “After the historic losses, you may see moderate Republicans break from party loyalties and potentially help pass legislation they feel is important to the American electorate.”
Newsweek’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here.
Contact Newsweek editors on this story: Jason Lemon and Dave Siminoff.
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