Section 1. Short title
This Act may be cited as the Student Loan Interest Cap Act.
Section 2. Reduction of maximum interest rates for Federal Direct student loans
Section 455(b) of the Higher Education Act of 1965 (20 U.S.C. 1087e(b)) is amended—
(1) by redesignating paragraphs (9) and (10) as paragraphs (10) and (11), respectively; and
(2) by inserting after paragraph (8) the following;
(i) Notwithstanding the preceding paragraphs of this subsection, for a loan specified in clause (ii) for which the first disbursement is made on or after July 1, 2024, the applicable rate of interest shall not exceed 3 percent.
(ii) The loans specified in this clause are the following:
(I) Federal Direct Stafford Loans.
(II) Federal Direct Unsubsidized Stafford Loans.
(III) Federal Direct PLUS Loans.
(B) Rate for consolidation loans
Notwithstanding the preceding paragraphs of this subsection, any Federal Direct Consolidation Loan for which the application is received on or after July 1, 2024, shall bear interest at an annual rate of not more than 3 percent on the unpaid principal balance of the loan, regardless of the interest rates of the loans consolidated by such Federal Direct Consolidation Loan.