Fresh Start is a one-time temporary program from the U.S. Department of Education offering special assistance for borrowers with defaulted federal student loans.
What Happens When I Enroll?
If you use Fresh Start to get out of default, here’s what will happen:
Your defaulted loans will be transferred from the Default Resolution Group (or from a guaranty agency) to a loan servicer.
Your defaulted loans will return to “in repayment” status.
The record of your default will be removed from your credit report.
Which Loans Are Eligible
Defaulted Direct Loans
Defaulted Federal Family Education Loan (FFEL) Program loans
Defaulted Perkins Loans held by ED
Who is Eligible for Fresh Start?
Approximately 7.5 million borrowers with federal student loans in default could qualify for the Fresh Start program, covering various loan types.
You must have defaulted before the forbearance began on March 13, 2020.
You're self-employed and had a drop in income of at least 25%
You're single and have an income of less than $100,000. You're married and have an income of less than $200,000.
Added Benefits When You Enroll
Income-driven repayment plans: On an income-driven repayment plan, you can reduce your monthly payment.
Student loan forgiveness: Defaulted student loans are ineligible for federal student loan forgiveness programs, but the Fresh Start program restores that option.
Student loan deferment and forbearance: Federal student loans come with some short-term relief options, but you normally lose those when you default. With Fresh Start, your student loan deferment and forbearance options will be restored.
How long will it take for my Fresh Start application to go through?
It is estimated to take between 4–6 weeks for most people be transferred to their new non-default servicer.
What if I go into default again later?
If you go into default again after Fresh Start, your loan’s original date of delinquency will be used in the information provided to credit reporting agencies. That means that Fresh Start won’t reset how long credit reporting agencies report your loan as delinquent or in default.
If you take out a new loan during or after Fresh Start, that new loan won’t be affected by Fresh Start. So if you default on that new loan, it will be reported to credit reporting agencies, and you will experience all the regular effects of default.