![]() ![]() If you would like more information on student loan repayment options, send an email to DISB at or visit DISB.dc.gov/studentloanhelp. Borrowers who do not make payment arrangements during the Fresh Start initiative will be subject to default collections one year after the payment pause ends. Ultimately, borrowers with Fresh Start eligible loans must make arrangements for long-term payments with ED. ![]() ![]() If you have more than one student loan, you can try to consolidate your loans into a direct consolidation loan. ED will remove the default status of the loans from the borrowers’ credit reports, which will allow borrowers to enroll in an income driven repayment plan (IDR). If you’ve defaulted on your student loan payments, you might consider both loan rehabilitation and loan consolidation. Defaulted Federal Family Education Loan (FFEL) Program loans (both ED-held and commercially held)īorrowers with eligible defaulted federal student loans can take advantage of Fresh Start by calling the Default Resolution Group at (800) 621-3115, visiting myeddebt.ed.gov, or contacting their loan holder by phone or in writing.īorrowers who make payment arrangements will be transferred to a non-default loan servicer.Ford Federal Direct Loan (Direct Loan) Program loans Removes student loan borrowers from the federal Credit Alert Verification Reporting System (CAIVRS), making it easier for them to afford living expenses as they become eligible for lower interest rates and more favorable credit terms.Note: Typically, rehabilitation is only available once per borrower. Restores eligibility for future loan rehabilitation for borrowers who rehabilitated during the pause.Protects borrowers from wage garnishments and costly collection fees.Restores eligibility to receive federal student aid including Federal Pell Grants and work-study.Restores access to repayments options including income driven repayment plans and the opportunity to pursue loan forgiveness.The Benefits of Fresh Start for Eligible Loans This action allows the borrower to remain eligible to receive federal student aid beyond the Fresh Start period. Once new aid is disbursed to borrowers under Fresh Start, ED will transfer their eligible defaulted federal student loans to a non-default servicer, which will remove the loans’ default status from borrowers’ credit reports. Currently, eligible defaulted borrowers can apply for federal grants, loans or work-study funds through the Free Application for Federal Student Aid (FAFSA) form. Fresh Start allows borrowers with eligible defaulted federal student loans to apply for federal student aid so that they may complete their degree. If you have defaulted and are dealing with collections related to your private student loan debt, see our page on private student loan collections.Eligible federal student loan borrowers can be brought out of default thanks to Fresh Start, an initiative launched by the US Department of Education (ED) on April 6, 2022. This includes letting the Department of Education and the Consumer Financial Protection Bureau know of your complaints about collection agencies. You also have the right to fight back against debt collection agency harassment or abuse. Review the various federal loan cancellation options to see if any apply to you. You should first understand the potential consequences of default, and then explore various ways you may be able to get out of default. There are ways to recover even if you have already defaulted and experienced collection. If you are in this situation, this does not mean you should give up. The government may be able to garnish your wages, seize your federal tax refunds, and even take a portion of your Social Security benefits to collect on your student loan debt. If you default on your federal student loan debt, the federal government has powerful tools to collect on the debt. If you fall behind on your student loan payments, you need to act quickly to avoid defaulting on your debt. See our page on Fresh Start for more information about signing up for this time-limited program. The pause on collections will continue for all loans that are eligible for Fresh Start (loans that defaulted before the pandemic) through the end of the Fresh Start period. The Fresh Start program will run until September 30, 2024. While the payment pause ended on September 1, 2023, the Department of Education announced a new program, called Fresh Start, to help borrowers get out of default quickly and easily before collections begin again. Due to the COVID-19 payment pause, most collections on federal student loan debt have stopped. ![]()
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