Fresh Start Program for Borrowers with Student Loans in Default

Fresh Start is a one-time temporary program from the U.S. Department of Education that offers special benefits for borrowers with defaulted federal student loans.

Most defaulted federal student loans are eligible for Fresh Start benefits. 

These loans are eligible for Fresh Start:

• Direct Loans
• Perkins loans held by the Department of Education, 
• Most Federal Family Education Loan (FFEL) loans (held by the Department of Education and commercial lenders) that defaulted before the pandemic.

These loans are not eligible for Fresh Start:

• Health Education Assistance Loan (HEAL) loans  
• Defaulted Perkins loans held by schools 
• Loans placed with the U.S. Department of Justice for ongoing litigation
• Loans that go into default after the payment pause ends in September 2023 
• FFEL loans that defaulted during the pandemic (these loans will be taken out of default automatically as a result of the expansion of COVID-19 relief, but these loans aren’t eligible for Fresh Start)

The easiest and best way to find out if your student loan is in default is to check with your servicer. If you aren’t sure who that is — or aren’t ready to have a conversation with them about your loans — you have a couple of other options.

• Log in to studentaid.gov. All federal student loan borrowers have a My Federal Student Aid account they can access with their FSA ID. Sign in to your account, select a loan and look at its repayment status to see if it’s listed as in default. Your account also includes information about your servicer, if you need it.
• Pull your credit report. Your credit report will list federal and private student loan defaults under the negative information section. You can get a copy of your report for free each week at annualcreditreport.com.

Some Fresh Start benefits are automatic, such as the additional pause on collections and temporary restoration of eligibility for financial aid.

To get your loans out of default using Fresh Start, you have to contact your loan holder and ask for Fresh Start before the end of September 2024. Your loans will then be removed from default and transferred to a new loan servicer. If you do not sign up for the Fresh Start program before the end of September 2024, then your loans will remain in default and you may once again face collection on your loans, such as wage garnishments, tax refund offsets, and Social Security offsets. 

Additionally, if you want to sign up for an income-driven repayment plan (IDR), ask your loan holder when you contact them about Fresh Start. You will have to provide some information about your income and family size. In an IDR plan could offer monthly payments as low as $0.

If your loans are held by the Department of Education, you can contact the Default Resolution Group to ask for a Fresh Start. If your loans are held by a commercial lender, you should call your Guaranty Agency to sign up for Fresh Start. The Guaranty Agency will transfer your loans to the Default Resolution Group to get your loans out of default and transfer you to a new loan servicer.

Call the Default Resolution Group at 1-800-621-3115 if you don’t know or are unsure who has your loans.  The Default Resolution Group will tell you who has your loans and what steps you need to take to sign up for Fresh Start.

When you contact the Default Resolution Group or your Guaranty Agency to ask to get your loans out of default using Fresh Start, you should also let the customer service representative know if you are interested in an income-driven repayment (IDR) plan. The customer service representative will then ask a series of four to five questions about your income and family size. Before calling, it may be helpful to look up your income on your most recent federal tax return (line 11 of IRS Form 1040). But if you can’t find it or didn’t file taxes, you can still sign up for an IDR plan. 

The customer service representative should be able to tell you over the phone what your monthly payment will be under an IDR plan. They will then pass on this information to your new loan servicer during the transfer process. Under an IDR plan, your payments could be as low as $0 per month. 

Once your loan is transferred to your new loan servicer, your new loan servicer will then use the information you gave to sign you up for IDR. They will send you a notice and let you know when your payments will be due. It may take 30-45 days after you first ask for Fresh Start to have your loans transferred to your new loan servicer.  

Yes, Fresh Start is available to incarcerated borrowers. The Department of Education released a guide on signing up for Fresh Start while you are incarcerated. You can find the guide with the information on the Department of Education’s website. Borrowers who are incarcerated can call these numbers to sign up for Fresh Start:

• 1-800-621-3115 (toll-free)
• 540-792-9171 (toll number – collect calls will not be accepted at this number)
• 1-877-825-9923 (TTY, if you are deaf or hard of hearing)

You can also ask for a Fresh Start by sending a letter to:

Default Resolution Group
P.O. Box 5609
Greenville, TX 75403

If you need more help signing up for Fresh Start while you are incarcerated or have other issues with your student loan debt, you can send a letter to the Department of Education’s Student Loan Ombudsman at:

U.S. Department of Education
ATTN: Ombudsman Office
830 First Street NE
Washington, DC 20002

In addition to Fresh Start, if your release date is more than 10 years from now, you may be able to have your student loan debt written off.