Clean Slate through Repayment Act of 2026
- Sponsor
- Rep. Ross, Deborah K. [D-NC-2]
- Committees
- Education and Workforce Committee (primary)
- Last action
- Apr 16, 2026
Bottom line
The bill creates a mechanism for borrowers to clear defaulted federal student loan records from their credit history upon full repayment, potentially improving their financial standing.
What it actually does
This bill amends the Higher Education Act of 1965 to mandate that if a borrower fully repays a defaulted federal student loan, the Secretary of Education, guaranty agency, or loan holder must request consumer reporting agencies to remove the record of default and any related adverse information from the borrower's credit history. This aims to provide a "clean slate" for individuals who have resolved their defaulted student loan obligations.
Proponents argue
Proponents argue this bill offers a crucial second chance for individuals who have struggled with student loan debt but ultimately fulfilled their obligations. They contend that removing default records upon full repayment incentivizes borrowers to resolve their debts, helps them rebuild their credit, and allows them to access better housing, employment, and financial opportunities, thereby contributing to broader economic stability.
Opponents contend
Opponents might argue that removing default records, even after repayment, could diminish the accountability of borrowers and the integrity of credit reporting systems. They may contend that credit reports should accurately reflect past financial behavior, including defaults, to provide a complete picture for lenders and prevent moral hazard, potentially leading to increased risk for future creditors.
The bill is exceptionally short and clear, making it very accessible for any reader to understand its core purpose quickly.
Section 2. REMOVAL OF RECORD OF DEFAULT. Part G of title IV of the Higher Education Act of 1965 (20 U.S.C. 1088 et seq.) is amended by adding at the end the following: 'SEC. 494A. REMOVAL OF RECORD OF DEFAULT.'
Mandatory Removal of Default Record Upon Full Repayment
This provision requires that when a borrower fully repays a defaulted federal student loan (made, insured, or guaranteed under Title IV of the Higher Education Act), the entity holding or managing the loan (Secretary of Education, guaranty agency, or other holder) must instruct consumer reporting agencies to delete the record of that default and any associated negative information from the borrower's credit history. This effectively erases the negative credit impact of the default once the debt is fully satisfied.
Supporters argue
Supporters argue this provision provides a tangible incentive for borrowers to fully repay their defaulted student loans, offering a clear path to financial rehabilitation. They believe it aligns with the goal of helping individuals recover from past financial difficulties, allowing them to access better credit terms, housing, and employment, which benefits both the individual and the broader economy.
Critics contend
Critics might contend that while repayment is positive, erasing the default record entirely could obscure a borrower's full financial history, making it harder for future lenders to assess risk accurately. They may argue that a default, even if repaid, reflects a past inability to meet obligations, and this information is valuable for credit assessment.
Tradeoffs
The provision balances the desire to provide a "clean slate" and incentivize repayment for borrowers against the principle of maintaining comprehensive and historically accurate credit reports for lenders. It also weighs the administrative burden on loan servicers and credit agencies against the potential economic benefits for rehabilitated borrowers.