Clean Slate through Consolidation Act
- Bill Number
- H.R. 8356
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Education
- Status
- Introduced
- Latest Action
- 2026-04-16: Referred to the House Committee on Education and Workforce.
- Last Updated
- 2026-04-30T19:59:17Z
AI-Generated Summary
Clean Slate through Consolidation Act (H.R. 8356)
Purpose
This bill aims to help federal student loan borrowers who have defaulted (failed to make payments) by removing the record of that default from their credit history once they consolidate the loan into a new Federal Direct Consolidation Loan that pays off the defaulted one. The goal is to give borrowers a "clean slate" on their credit reports to improve their financial standing.
Key Provisions
- Amends Section 455(g) of the Higher Education Act of 1965 by adding a new subsection (4).
- Requires the Secretary of Education, guaranty agencies (organizations that insure loans), or other loan holders to request that consumer reporting agencies (credit bureaus like Equifax, Experian, and TransUnion) remove the default record from the borrower's credit history.
- This applies specifically when a borrower obtains a Federal Direct Consolidation Loan that fully discharges (pays off) the defaulted loan under Title IV of the Higher Education Act.
Significant Changes to Existing Law
- New requirement: Previously, consolidating a defaulted loan might resolve the default but did not automatically mandate removal of the default notation from credit reports. This bill adds a mandatory step for loan holders to request its removal from credit histories.
Potential Impacts
- On citizens (borrowers): Improves credit scores, making it easier to qualify for mortgages, car loans, rentals, or jobs that check credit. Encourages more borrowers to consolidate defaulted loans.
- On government agencies: Increases administrative duties for the Department of Education and loan servicers to notify credit bureaus, potentially at low cost since requests are routine.
- No direct impact on international relations.
- Could lead to higher rates of loan consolidation, reducing long-term defaults in the federal student loan system.
Main Stakeholders Affected
- Student loan borrowers with defaulted federal loans (primary beneficiaries).
- Department of Education (Secretary must comply).
- Guaranty agencies and loan holders/servicers (required to make requests to credit bureaus).
- Consumer reporting agencies (must process removal requests).
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens borrower protections under federal student aid laws without altering loan forgiveness or repayment rules. Relies on existing consolidation processes.
- Constitutional: No apparent issues; falls under Congress's authority to regulate federal lending programs.
- Political: Supports financial rehabilitation for lower-income or struggling borrowers (sponsored by Democratic representatives); may face debate over incentives for repayment vs. perceived leniency on defaults. Still in early stages (introduced April 16, 2026; referred to House Committee on Education and Workforce).
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Stevens, Haley M. [D-MI-11]
Cosponsors (3)
Rep. Adams, Alma S. [D-NC-12], Rep. Ross, Deborah K. [D-NC-2], Rep. Williams, Nikema [D-GA-5]
Recent Actions
- 2026-04-16: Referred to the House Committee on Education and Workforce.
- 2026-04-16: Introduced in House
- 2026-04-16: Introduced in House
Bill Versions
- Clean Slate through Consolidation Act — issued 2026-04-16 — PDF (2 pages)