A bill to amend the Higher Education Act of 1965 to promote the matching of lists of defaulting borrowers of student loans with lists of public employees.

Amends the Higher Education Act of 1965 to direct the Secretary of Education to promote the use of data processing equipment, by each State and nonprofit institution and organization which has an agreement relating to Federal payments to reduce student interest costs, to identify public employees in such State served by such State, institution, or organization who have defaulted on any loan covered by such agreement. Directs the Secretary to consider the volume of loans covered and the need for State legislation, in determining the action to be taken for such promotion. Prohibits any such action which would impair the contractual rights of any person, as against the United States, to payments under provisions for Federal, State, and private programs of low-interest insured loans to students in institutions of higher education.