Student Loan Bond Expansion Act of 2026

Key Points

• Congress is considering a bill to make it easier for states to raise money for student loans. It would change tax rules to allow states to sell more student loan bonds, which are used to fund low-interest loans for college students.
• Currently, there is a limit on how many of these special bonds a state can issue each year. This bill would remove that limit, allowing states to provide more financial aid to students who need help paying for school.
• The plan also changes how these bonds are taxed. It would make the interest earned by investors tax-free, even for those who usually have to pay a specific alternative minimum tax. This makes the bonds more attractive to investors, which helps keep loan costs down.
• If passed, this could lead to more available loans or lower interest rates for students getting help through state-run programs. The changes would apply to any new bonds issued after the bill becomes law.

Impact Analysis

Govbase has not yet run an impact analysis on this legislation.