The Fresh Start Program can move your loans out of default and help you qualify for forgiveness — but you have to apply by Sep. 30.
The Fresh Start Program can move your loans out of default and help you qualify for forgiveness — but you have to apply by Sep. 30.
If you have student loans that are in default, today’s the last day to get them out of default through the Fresh Start program.
Before the pandemic-related payment pause that started in March 2020, more than 8 million federal loan borrowers had defaulted on their student loans. Your loans are considered in default when you’ve missed payments for 270 days or more. Once student loans are in default, they’re often no longer eligible for forgiveness programs and other federal student loan benefits. However, the Fresh Start program, offers a way to for you to get your loans back in good standing and qualify for debt relief.
The Fresh Start program is a one-time offering from the Department of Education that lets you move your student loans out of default status, while offering many other benefits. But there’s a deadline: You have to apply by the end of the day today, Sept. 30, 2024. Here’s how it works.What is the Fresh Start Program?
The Fresh Start program is a temporary, one-off program from the Department of Education that can help you get your student loans out of default. Your loans are considered in default status if you missed more than 270 days of payments on them. Fresh Start has an simple sign-up process and can return your loans to active repayment status within four to six weeks.
Normally, borrowers have two options for getting loans out of default: student loan consolidation and rehabilitation, both of which can take several months. Fresh Start is temporarily replacing rehabilitation — and its offers several additional benefits.
«The Fresh Start Initiative is the best opportunity for getting student loans out of default», said financial aid expert and CNET Money Expert Reviewer Mark Kantrowitz. Current benefits for borrowers with defaulted federal student loans
Between now and the end of September, all borrowers automatically get the following perks:
Collections pause: The Department of Education stopped collections activities on defaulted loans starting in March 2020. You won’t get collections calls or be subject to wage, tax refund or Social Security garnishment. If your loans are moved out of default, you won’t have to worry about collections activities as long as you keep up with your monthly payment.
Credit reporting changes: The government will also report your loans as current to the credit bureaus, so you won’t see your accounts in collections on your credit report.
Access to financial aid and government-backed loans: You may be able to qualify for federal student aid again, such as grants, work-study and student loans. You may also be able to access other types of government-backed loans, such as FHA mortgages.
