A series of bills have been introduced in the House of Representatives aimed at giving individuals with defaulted student loans a “clean slate” by removing negative credit reporting tied to those defaults after borrowers take specific actions to resolve their debt.
The legislative package includes three separate bills that each tie credit reporting relief to a different path out of default. At a high level, all three measures would require the removal of default-related information from a borrower’s credit history once the borrower has satisfied certain conditions tied to repayment, rehabilitation, or consolidation.
The first bill, the Clean Slate through Consolidation Act, introduced by Rep. Haley Steves [D-Mich.], would require that once a borrower consolidates a defaulted federal student loan into a Federal Direct Consolidation Loan that discharges the defaulted loan, the record of that default must be removed from the borrower’s credit history.
The second bill, the Clean Slate through Rehabilitation Act, introduced by Rep. Nikema Williams [D-Ga.], expands on existing rehabilitation frameworks by requiring the removal of all adverse credit information related to a loan, not just the default itself, once the borrower successfully rehabilitates the loan.
The third bill, the Clean Slate through Repayment Act, introduced by Rep. Deborah Ross [D-N.C.], takes a more straightforward approach. It would require that once a borrower fully repays a defaulted federal student loan, the default and any related negative information must be removed from the borrower’s credit history.
Taken together, the bills represent a coordinated effort to link credit reporting outcomes directly to borrower behavior after default. Rather than allowing default records to remain for extended periods, the proposals would effectively reset a borrower’s credit profile once they have taken defined steps to resolve the debt.
“As a first-generation college student, I know how hard it is to make ends meet and pay for college,” said Rep. Adams, founder and co-chair of the HBCU Caucus, in a statement. “That’s why the Clean Slate Series is so necessary. Burdensome student loan debt is dragging down millions of our best and brightest, preventing borrowers across generations from qualifying for the credit they need to buy a house, lease a car, or start a business. These three bills help borrowers hit the reset button and unlock a brighter future for themselves and their families.”
If enacted, these measures would shorten the duration of negative credit reporting tied to defaults and could impact recovery strategies, credit reporting practices, and the long-term value of defaulted student loan portfolios.
The bills have been introduced and referred to committee, where they will be subject to further consideration.
