A group of Democrats in Congress introduced a bill to erase interest on all current federal student loans and cap interest rates for all future borrowers.

The Student Loan Interest Elimination Act would "amend the Higher Education Act of 1965 to eliminate interest on student loans" and "increase annual and aggregate loan limits," according to the legislation text.

"The approach is the latest—and most moderate—move by Democrats to reduce the amount paid back by student loan borrowers," Emma Camp wrote Friday in Reason. 

"Unlike other Democrat-led student loan proposals—most notably, President Joe Biden's recently defeated $400 billion student loan forgiveness plan—this latest bill doesn't propose foisting its costs onto taxpayers," Camp continued.

The act, led by Connecticut Rep. Joe Courtney and Vermont Sen. Peter Welch, both Democrats, would adjust interest rates for future borrowers to be "based on a sliding scale determined by financial need (with the vast majority receiving a zero percent interest rate and no student getting an interest rate above 4 percent)," according to a fact sheet from Congressman Courtney's office.

"Under this legislation, the Department of Education would create a Trust Fund to offset the elimination of interest," the sheet stated. "Student loan borrowers will make payments on their principal balance and these funds will be put into the Trust Fund."