On April 6, 2022 the U.S. Department of Education (ED) announced an initiative called “Fresh Start” to help eligible borrowers who are in default. When payments resume on federal student loans, borrowers with loans previously in default can receive a fresh start and re-enter repayment in good standing. In addition, borrowers who are in default of a federal student loan may be eligible for federal financial aid through this Fresh Start program. If you’re eligible for Fresh Start, you can now access federal student aid again.
- Complete the FAFSA: Once we receive the results of your FAFSA, we will review your record to determine if you are eligible for the Fresh Start Initiative and will send additional information via your Baker College email.
- After your eligibility has been determined, you will be directed to this page to complete the Fresh Start Initiative Acknowledgement form. This must be completed and returned to the Financial Aid Department at Baker College.
- Note: By completing this form, you are agreeing to have your defaulted student loans transferred to a new loan servicer who you will work with to make payment arrangements to repay your loan.
- Monitor your Baker College email for additional communication regarding your financial aid application.
- Once financial aid is disbursed, you will receive additional information from your loan servicer. Your loan will be moved to a new servicer, placed in a "in repayment" status, and the default should be removed from your credit.
If you have a student loan that is in default, but are not looking to receive financial aid, you should contact your loan holder to enroll in the program and arrange to make long term payments. The Dept of ED will also reach out to students who may qualify for the Fresh Start initiative, make sure your contact information is up to date on your student loan servicer’s website as well as your studentaid.gov profile.
Note: The Fresh Start initiative will remain available to previously defaulted borrowers for one year after the COVID-19 payment pause ends.
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Borrowers with federal student loans in default will be able to:
- Gain access to Federal Student Aid to complete college
- Access to repayment plans such as income-driven repayment or opportunities for loan forgiveness
- No collection efforts for one year
- Reporting of all defaulted loans as 'current' and not in a defaulted status
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The Fresh Start initiative restores Title IV financial aid eligibility for borrowers with loans in the following categories that defaulted prior to the start of the student loan repayment pause on March 13, 2020:
- William D. Ford Federal Direct Loan Program loans (Direct Loans)
- Federal Family Education Loan (FFEL) Program loans, including Federal Insured Student Loans (FISL)
- Federal Perkins Loans (Perkins Loans) that are serviced by the Department's Debt Management and Collections System (DMCS)
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- Defaulted Perkins Loans held by schools
- Defaulted Health Education Assistance Loan Program loans
- Student loans remaining with the U. S. Department of Justice for ongoing litigation
- Direct Loans that default after the end of the COVID-19 student loan payment pause
- FFEL Program loans that default after the end of the COVID-19 student loan payment pause
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