Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Student Loans Student Loan Repayment Fresh Start Program for Student Loans [Ended — What to Do Now] Updated Nov 07, 2024 6-min read Expert Approved Expert Approved This article has been reviewed by a Certified Financial Planner™ for accuracy. Written by Rebecca Safier Written by Rebecca Safier Expertise: Student loans, personal loans, home equity, credit, budgeting Rebecca Safier is a personal finance writer with nearly a decade of experience writing about student loans, personal loans, budgeting, and related topics. She is certified as a student loan counselor through the National Association of Certified Credit Counselors. Learn more about Rebecca Safier Reviewed by Chloe Moore, CFP® Reviewed by Chloe Moore, CFP® Expertise: Equity compensation, home ownership, employee benefits, general finance Chloe Moore, CFP®, is the founder of Financial Staples, a virtual, fee-only financial planning firm based in Atlanta, GA, and serving clients nationwide. Her firm is dedicated to assisting tech employees in their 30s and 40s who are entrepreneurial-minded, philanthropic, and purpose-driven. Learn more about Chloe Moore, CFP® Editor’s note: The Fresh Start Program for federal student loans ended on October 2, 2024. If you have defaulted loans, other options, such as loan rehabilitation or consolidation, may help you restore your loans to good standing. The Fresh Start Program offered borrowers a chance to bring defaulted federal student loans back into good standing and access benefits such as income-driven repayment and forgiveness. While the program ended on October 2, 2024, you still have options to address defaulted loans. Explore alternatives such as loan rehabilitation and consolidation to help you regain control of your loans. Table of Contents Skip to Section What was the Fresh Start program?What else to knowFAQ What was the Fresh Start program for student loans? The Fresh Start Program was a temporary initiative designed to help borrowers get federal student loans out of default. It replaced traditional student loan rehabilitation and ended on October 2, 2024. Borrowers with defaulted loans benefited from several features of Fresh Start automatically, including: Access to financial aid: Typically, borrowers with defaulted loans aren’t eligible for financial aid. However, Fresh Start allowed access to federal grants, work-study, and other loans to support returning to school. It also enabled access to government-backed loans including FHA mortgages. Paused collections: Collections on defaulted student loans had been paused during the COVID-19 forbearance period and continued through the Fresh Start period. This pause prevented garnishments of wages, tax refunds, and Social Security benefits. Positive credit reporting: During Fresh Start, the Department of Education reported defaulted loans as current, providing a potential boost to borrowers’ credit scores. Rehabilitation flexibility: Normally, borrowers can only rehabilitate a loan once. Fresh Start allowed borrowers to use rehabilitation in the future without counting this program against their one-time chance. Active loan status: Borrowers’ loans returned to “in repayment” status with a new loan servicer. Default removal from credit reports: The Department of Education removed records of default from enrolled borrowers’ credit histories, helping improve their credit standing. Access to repayment plans: Loans were initially placed on a standard 10-year repayment plan, but borrowers could switch to other options, such as income-driven repayment (IDR). Many borrowers qualified for a $0 monthly payment under an IDR plan. Deferment and forbearance options also became available again. Eligibility for forgiveness programs: Enrolled borrowers became eligible for federal loan forgiveness programs, including Public Service Loan Forgiveness (PSLF). Tip If you missed the Fresh Start Program deadline, other options, including loan rehabilitation and consolidation, may still help you restore your federal loans to good standing. Who was eligible for Fresh Start? Any federal student loan borrower who defaulted on their student loans before the COVID-19 payment pause was eligible for Fresh Start. You were still eligible even if you used student loan rehabilitation or consolidation to get your loans out of default in the past. However, you wouldn’t be eligible if you defaulted after the payment pause ended. Fresh Start student loans Here are the loans that were eligible for Fresh Start. Eligible Not eligible Federal Direct Loans Perkins loans held by schools Federal Family Education Loans (FFEL)Health Education Assistance Loan Program loansPerkins loans held by the Department of Education Student loans involved in ongoing litigation with the U.S. Department of Justice Direct or FFEL Program loans that defaulted after the end of the Covid-19 payment pause If you’re not sure about your options now that Fresh Start has expired, call the Default Resolution Group at 800-621-3115 (TTY number is 877-825-9923) for help. What to know about Fresh Start The Fresh Start program had several advantages and considerations for borrowers in default. Advantages of Fresh Start Fastest way to get out of default: You didn’t need to jump through many hoops to sign up for Fresh Start, and your loans were returned to good status within four to six weeks. By contrast, student loan consolidation sometimes requires three payments before you can use it to get your loans out of default, and rehabilitation requires nine payments over 10 consecutive months. Restored access to federal benefits: After signing up for Fresh Start, borrowers could restore their access to federal financial aid, have collections activities paused, and be eligible for federal repayment plans and forgiveness programs. Removed default from your credit report: After signing up for Fresh Start, borrowers saw their student loan default drop off their credit report, making it easier to take out a loan, open a credit card, or rent an apartment. Noteworthy considerations of FreshStart Deadline to apply: The deadline to apply was September 30, 2024. For incarcerated students with loans in default, the deadline was August 31, 2024. Lose current benefits if you didn’t take action: If you had student loans in default, you were already getting some benefits automatically from the Fresh Start program, but you lost these benefits if you didn’t apply for Fresh Start before the deadline. Not all loans were eligible: Some federal loans aren’t eligible for Fresh Start, such as Perkins loans and Health Education Assistance Loan Program loans. Plus, your loans weren’t eligible if they fell into default after the end of the COVID-19 payment pause. Any person who has student loans in default, meets the requirements, and wants to get back on track is an excellent candidate for the Fresh Start program. Taking advantage of the program before the deadline can help you avoid the negative repercussions of the collections process. Chloe Moore, CFP® FAQ How did Fresh Start for student loans differ from loan forgiveness programs? The Fresh Start Program focused on helping borrowers get out of default and regain access to repayment plans, deferment, forbearance, and forgiveness programs. Unlike loan forgiveness, which cancels part or all of your debt, Fresh Start aimed to make repayment manageable by restoring borrowers to good standing. It was broadly accessible to eligible borrowers, regardless of career or income. What documentation is required for the Fresh Start program? Because the Fresh Start Program ended on October 2, 2024, it’s no longer available. For alternative solutions—for example, loan rehabilitation or consolidation—documentation such as proof of income, recent tax returns, and a list of debts may be required. Check with your loan servicer for specific requirements. How long did the application for Fresh Start take? The Fresh Start Program has now concluded, so new applications are no longer accepted. If you’re seeking other options to address default, timelines for rehabilitation or consolidation vary but typically take several weeks from the submission of complete documentation.