H.R. 8351: Clean Slate through Repayment Act of 2026

This bill, titled the Clean Slate through Repayment Act of 2026, proposes to amend the Higher Education Act of 1965 to change how defaults on certain student loans are recorded in credit histories. Specifically, it requires that when a borrower fully repays a defaulted loan that was made, insured, or guaranteed under the Higher Education Act, the relevant authorities, including the Secretary of Education or loan guaranty agencies, must request that credit reporting agencies remove the record of that default from the borrower's credit history.

Key Provisions

• The act focuses on loans that fall under title IV of the Higher Education Act, which includes federal student loans.
• If a borrower pays off a defaulted student loan in full, their default record will be removed from their credit history.
• The relevant authorities are obligated to initiate the removal process with consumer reporting agencies.

Implications

This change is designed to provide borrowers with a chance to improve their credit scores after repaying defaulted loans. By removing the negative impact of a defaulted loan once it has been fully paid, this bill aims to encourage repayment of loans and assist individuals in rebuilding their creditworthiness.

Relevant Companies

None found