The New York Republican is proposing a reduction in student loan interest rates

With President-elect Trump set to return to the White House in January, the sun appears to be setting on the Biden administration’s student loan bailout.

But one New York Republican still thinks Congress should act to ease the debt burden borne by borrowers. Representative Mike Lawler, RN.Y., introduced legislation this week that would reduce the interest rate on federal student loans from 3.5% to just one percent.

“There’s no question that we have a student loan default problem in this country,” Lawler told Fox News Digital in an interview. “And the bill I introduced would seek to address that legislatively by capping all student loan interest rates at 1%, including going back to actually help address the problem of unaffordability by providing lower interest student loans.”

Americans owe an estimated $1.74 trillion in student loan debt. President Biden made a campaign promise to eliminate all that debt, but his various attempts to do so without Congressional action have been met with stiff opposition from Republicans and narrow defeats in court. Earlier this year, a group of GOP-led states filed a lawsuit to end Biden’s SAVE repayment plan, which is designed to make student loan payments more affordable and forgive accumulated debt after 10 years of repayment.

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Republicans have described the Democratic president’s approach to student loan forgiveness as overreaching and unfairly benefiting college-educated borrowers, while others receive no such help.

But Lawler says his proposal is different from student loan forgiveness because it would not involve taxpayers in the bailout of borrowers.

“The aim here is to make sure that we offer low interest loans to students, but in the end we make sure that the people who take these funds are the ones who have to pay for them and not the taxpayers,” he said.

Lawler’s bill, called the Affordable Loans for Students Act, would also apply a one percent interest rate on student loans. It would authorize the Department of Education to change the interest rate and refinance these loans automatically, without requiring borrowers to sign up. Repayment will not be compulsory and borrowers can withdraw if they want.

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President Biden speaks during an event in Madison, Wisconsin, on April 8, 2024. (Daniel Steinle/Bloomberg via Getty Images/Getty Images)

Additionally, the bill would allow borrowers to consolidate some of their outstanding debt to make payments easier under the new, lower interest rate.

Lawler said it is “critical” to ensure that federal loans are offered at affordable rates to Americans.

“We must not rob students who are trying to get an education and ultimately contribute to our economy moving forward,” he said. “We need a highly educated workforce. And being able to afford college has become a major barrier to that.”

Asked if he was concerned that the availability of cheap federal loans would push more borrowers into debt and have an inflationary effect on college tuition, Lawler said his proposal is one of the reforms needed in higher education and the workforce.

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Melissa Byrne, We The 45 Million, joins student loan borrowers to demand President Biden use “Plan B” to cancel student debt quickly at a rally outside the United States Supreme Court on June 30, 2023, in Washington, DC. (Paul Morigi/Getty Images for We The 45 Million / Getty Images)

He suggested that Congress should reexamine how schools are accredited and open up tax breaks for universities — a favorite idea of ​​President-elect Trump, who has complained that colleges and universities are too left-leaning. Lawler also said there should be more support for alternatives to a college education.

“I’m a big believer in vocational and vocational schools and the need to have a path out of K-through-12 education to that. Not everyone is going to go to college, but those who need to definitely have a less expensive way to get there and I think we’ve seen over time the problem of affordability has exploded when it comes to higher education.”

The Affordable Loans for Students Act was endorsed by the American Council on Education (ACE), the National Association of Student Financial Aid Administrators (NASFAA) and the American Association of Colleges and Universities (AAC&U), according to Lawler’s office.

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Lawler said he hopes to gain bipartisan support for his bill in Congress.

“think this is a place where Republicans and Democrats, you know, can find consensus and the deal that we need to deal with high-interest and low-interest student loan affordability is the way we can get a deal.”