Student borrowers get credit-record reset after consolidating defaulted loans
H.R. 8356 — Clean Slate through Consolidation Act · Filed by Haley Stevens (D-MI) · 3 cosponsors · Introduced Apr 16, 2026 · Referred to committee
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What it does
This bill requires the Department of Education and loan servicers to ask credit reporting agencies to remove default records from borrowers' credit histories when they consolidate their defaulted federal student loans into a Federal Direct Consolidation Loan. The borrower benefits by getting a fresh credit slate after consolidating, which can improve their creditworthiness and access to future credit.
Why we flagged it
The bill is a targeted consumer-protection measure that improves credit outcomes for borrowers who consolidate defaulted federal student loans. It is straightforward debt-relief policy with no hidden mechanisms or narrow beneficiaries.
What the text implies
- Removal of default records may incentivize borrowers to consolidate rather than pursue other repayment options (income-driven repayment, forbearance), potentially increasing federal loan portfolio concentration.
- Credit-reporting agencies are not explicitly required to comply; the bill mandates only that servicers 'request' removal, leaving compliance discretionary and potentially creating a gap between intent and outcome.
The full analysis lists 3 implications of this text.
Who stands to gain
student loan borrowers (improved credit access); credit reporting agencies (potential reduction in default records to maintain)