This bill would require the removal of student loan default records from borrowers' credit histories when they obtain a Federal Direct Consolidation Loan that pays off their defaulted loan. The legislation amends the Higher Education Act to mandate that the Department of Education, guaranty agencies, or other loan holders request credit reporting agencies to delete the default record once consolidation occurs. The bill would affect borrowers who have defaulted on federal student loans and use consolidation as a path to rehabilitate their credit standing. There is no specific funding amount or implementation timeline specified in the legislation. Essentially, the bill gives borrowers a "clean slate" by removing the mark of default from their credit history when they consolidate their defaulted loans.
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