A bill to amend the Internal Revenue Code of 1954 to provide for the collection of certain defaulted Federal student loans from income tax refunds.

Amends the Internal Revenue Code to provide for the collection of defaulted Federal student loans by offset against income tax refunds of those individuals found to be in default on such loans.

Defines "Federal student loans" as federally insured loans to graduate students in the health professions. Sets forth special rules with respect to joint returns and fiscal year taxpayers.

Requires the Secretary of the Treasury to: (1) notify the Secretary of Health and Human Services of the amounts collected with respect to any loan to any individual; and (2) transfer such amounts to the Secretary as is necessary to reimburse the entity or fund to which the loan is repayable. Requires that such notification and transfer be made not less often than monthly.