This bill establishes a new federal student loan program called the Affordable Future Loan Program, which would operate alongside existing federal student lending programs from 2025 through 2029. The program allows the government to pay interest on loans for undergraduate students while they are in school and to guarantee up to 96 to 98 percent of loans that go into default, with participating banks and lenders issuing the actual loans. To qualify, students must first apply for federal grants and existing federal loans, and borrowing would be capped at $19,000 annually, adjusted for inflation. Interest rates would be tied to the 10-year Treasury note with a maximum cap of 6.28 percent, and borrowers would choose between a 15-year fixed repayment plan or an income-driven option where monthly payments equal 10 to 15 percent of income above 150 percent of the poverty line. The bill also includes provisions to help borrowers rehabilitate defaulted loans and includes anti-discrimination protections, though it does not specify exact funding amounts, only authorizing "such sums as may be necessary" for the program period.
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