The Department of Education recently created a new program designed to bring borrowers out of default and back into good standing as easily as possible. Normally borrowers need to meet very specific requirements and consolidate or participate in a 10 month long loan rehabilitation program, but Fresh Start is designed to easily bring people out of default quickly.
Who is eligible for Fresh Start?
You're eligible for Fresh Start if you have any of the following loan types:
- Defaulted Direct Loans
- Defaulted FFEL Loans
- Defaulted Perkins Loans held by the Dept. of Ed.
What are the benefits of Fresh Start?
If you enroll in Fresh Start, you'll have access to the following benefits:
- The Dept. of Ed. will stop reporting your loan as defaulted, and you'll be brought back into good standing
- You'll have restored access to Income-Driven Repayment Plans so your monthly payments are affordable
- You'll have restored access to forgiveness programs like PSLF
- Collections will stop (no wage garnishment, no withholding tax refunds, no withholding of Social Security)
- You'll be eligible to take out new federal loans
- Collection calls will not be made
How Do I enroll in Fresh Start?
To take advantage of this and enroll in Fresh Start, you'll need to reach out to your loan servicer and request to enroll in the program. They'll enroll you in Fresh Start, and you'll be transferred to a non-default servicer within 15 days. If you don't know who your servicer is, you can call 1-800-621-3115. This is the Department of Education Loan Locator, which will help you find out which agency your loans have been assigned to.
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