Fresh Start Initiative
For borrowers that have a defaulted loan where the default occurred prior to March 13, 2020, you may be eligible for the Fresh Start Initiative announced by the U.S. Department of Education (ED). Fresh Start offers an opportunity to get your loan status changed from “default” to “current.”
If you qualify, you will have one year after the payment pause ends to take advantage of Fresh Start. If the payment pause is extended, your deadline to act will also be extended. Please check www.StudentAid.gov/coronavirus for more information about when the payment pause is currently scheduled to end.
Your defaulted Federal Family Education Loan Program (FFELP) student loan(s) held by National Student Loan Program is eligible for the Fresh Start Initiative announced by the U.S. Department of Education (ED) on April 6, 2022. Fresh Start offers an opportunity to get your loan status changed from “default” to “current.”
There are several additional benefits to Fresh Start that you can access if you contact us and request to participate:
- We will transfer your loans to Nelnet, a loan servicer.
- You will be able to choose an income-driven repayment (IDR) plan. On an IDR plan, your monthly payments are based on your income and may be as low as $0 per month, which is true for many borrowers. (Not all IDR plans available to Direct Loan borrowers are available to borrowers with FFELP loans like yours. However, you can gain access to those additional Direct Loan IDR plans if you consolidate your FFELP loan(s) into a new Direct Loan.)
- You will regain eligibility for federal student aid, like loans and grants. (You may also be able to opt-in to Fresh Start directly with your postsecondary institution’s financial aid office, by signing an acknowledgment along with your application for new Title IV aid).
- You will regain access to any loan forgiveness programs that may have otherwise been unavailable as a result of your default status.
- You will regain access to short-term relief (deferments and forbearances).
The time during which you can request to participate in Fresh Start (the “Fresh Start Period”) will be one year following the end of the pandemic payment pause. Currently, ED expects that payments will resume 60 days after either (a) ED is permitted to implement its Debt Relief program, or (b) the Debt Relief litigation, currently before the Supreme Court, is resolved. If the Debt Relief program has not been implemented and the litigation has not been resolved by June 30, 2023, payments will resume 60 days after that. In other words, borrowers seeking to take advantage of Fresh Start may do so at any time (including immediately) and can continue do so through the ongoing payment pause and for one year after the payment pause ends.
If you want to get on an IDR plan, please go to www.nslp.org/freshstart and complete the Fresh Start data form. This will include information on your family size, your adjusted gross income (and your spouse’s, if you’re married), tax filing status, and number of dependents you support.
Reminder of When You Need to Act
You will have one year after the payment pause ends to take advantage of Fresh Start. If the payment pause is extended, your deadline to act will also be extended. Please check www.StudentAid.gov/coronavirus for more information about when the payment pause is currently scheduled to end.
Additional Credit Reporting Benefits of Fresh Start
Credit reporting agencies generally stop reporting a defaulted loan after seven years. If you have been delinquent on your loan for more than seven years, we will delete any credit reporting information that we had previously reported, and we will no longer report your loan to any of the credit reporting agencies. If you go into default again after Fresh Start, the Department will not report negative credit information again.
If you became delinquent less than seven years ago, the Department will report your original date of delinquency if you become delinquent on your loan again after Fresh Start. This way, Fresh Start won’t extend how long the credit reporting agencies report your defaulted loan.
What Happens if You Don’t Act Before the End of the Fresh Start Period
If you don’t act by the end of the Fresh Start period, you will miss the chance to get your loan out of default and take advantage of other Fresh Start benefits. If you don’t act, here’s what may happen after the end of the Fresh Start period:
- Your wages may be garnished, and your tax refunds or Social Security benefits may be withheld.
- We may report your loan(s) as “in collections” to credit reporting agencies.
- You will no longer be eligible for federal aid student aid, like loans and grants, if you wish to return to school.
Please Note
If you have any defaulted student loans held by ED or other guaranty agencies (FFEL loans), you must contact those loan holders to inform them of your interest in participating in Fresh Start for those loans.
If You Have Questions
Visit www.StudentAid.gov/freshstart for more information about Fresh Start or call us at 800-735-8778 option 1.