The Fresh Start Program for Federal Student Loan Default

Having a federal student loan default is one of the worst things that can happen to your finances.
Fortunately, a TEMPORARY program will help defaulted borrowers restore their loans to good order with as little as a phone call. Check out this episode to see how
EPISODE RESOURCES
Fresh Start Program Details
studentaid.gov...
And if you haven't already, join our email list at escapestudentloandebt.com!

[@bignaf1875]

I was irresponsible and let my loans go into default. This gives me a chance to get things back right. That was/is easily the biggest financial mistake of my life: I wish I knew how serious it was years ago

[@EscapeStudentLoanDebt]

That's ok, this is your opportunity to start fresh! You got this!

[@ryanclark9386]

Same

[@katelynneodom9792]

I just started the Fresh Start program. What they don't mention is that the program allows you to pay back the Department of Education only. If you have loans that are still held with the school itself be sure to call the school and speak with Accounts receivable to settle a payment plan as well or else you will still receive offset letters claiming your tax refund.

[@vanessajimenez2489]

What if the school you attended is no longer in business? What can someone do in that type of scenario. Seeking some advice/guidance.

[@EscapeStudentLoanDebt]

You don't need the school's consent to apply for the fresh start program, so you should be fine if your loan is defaulted and you want to participate in the program. If your school closed and was found to have defrauded students, like in the cases of ITT Tech, Corinthian Colleges and others, you may be eligible to have your student loans forgiven under the Borrower Defense Loan Discharge program. Details are listed here studentaid.gov/manage-loans/forgiveness-cancellation/borrower-defense

[@TerranLikeKaren]

Thank you for this info my friend! I found you right after I made the phone call which was easy to do! There was a time when I was so scared to call in to the representatives and discuss these loans in fear that I wouldn't understand the process, have to remember my current income/job situation, fear of being judged, & just being down right lazy. This caused inaction on my part for over 8 years now. We have a tendency to be fearful of taking action on the very thing that will exalt us to our highest calling. Have you ever had a time where you sat back in fear and once you took action you said, "that was easy!"? Well ladies and gents, I just had that experience and feel a massive weight lifted from my shoulders, clarity on my vision, & motivation to see this through! Call in for your Fresh Start!

[@EscapeStudentLoanDebt]

I'm glad this worked out for you! And I agree, when it comes to money especially, it can be tough to just make the phone call and figure out where you stand. Sometimes burying your head in the sand seems easier, and we don't realize the damage being done. Congrats on your fresh start!

[@TerranLikeKaren]

@@EscapeStudentLoanDebt thank you 😊

[@fakechow88]

When you take the initiative to improve your life doors begin to open. Thank you so much for this video!!

[@EscapeStudentLoanDebt]

Our pleasure, glad you enjoyed it!

[@trendynow1369]

Just called and completed the initial process. Thank you for the clear and concise video

[@EscapeStudentLoanDebt]

Glad it was helpful!

[@fawnmiller2757]

Hello and thank you for all the great information you provide, I do have a question though can you tell us more about the rehabilitation program with the federal government I know it is similar to the fresh start program but that will be fazing out soon and I don’t know exactly how the rehabilitation process works.

[@NC-tg5ml]

wish we had been taught about student loans in high school before college loans, especially those technical schools where they really get you...... after graduation, I couldn't keep up with my payments, and struggling as a single parent really put me behind. now thankfully I can finally try to get this off my back slowly and steadily and try to build up my credit again.

[@benbridges552]

Friend, you just saved my ass. This was so concise and straight to the point, sooooo incredibly helpful, thank you so much!

[@EscapeStudentLoanDebt]

I'm glad it was helpful!

[@hygiverse]

I've been defaulted for 12 years...I tried disputing a few times I even stated law codes that they were violating by keeping my loans on my report....not only did they not change it, but they changed them to ACTIVE 😢

[@EscapeStudentLoanDebt]

Hi! There is no statute of limitations on federal student loans, so technically they can keep the default on your credit report forever (unlike a bankruptcy or a private loan). Have you checked out the Fresh Start program from the video? You still have time to take action on it. And if that doesn't work, there is also a process called student loan rehabilitation that could be a possibility (although you can only use this process once). Hope this helps

[@hygiverse]

@@EscapeStudentLoanDebt thanks

[@darrincook8364]

What happens after the Fresh Start Programs end? Does my loans goes back into default status … while I’m using fasfa?

[@EscapeStudentLoanDebt]

If you take advantage of the program before it ends, you will not have to worry about default status, it will be removed. It would only go back into default if you stopped making payments again

[@tincou7694]

If the loans have already fallen off my credit report - what would be the change in my report if I do fresh start?

[@EscapeStudentLoanDebt]

The biggest issue in that case is that the loans may have fallen off your report (which would likely mean you can't sign up for the program because you no longer have loans). But if the loans still exist, even if they're now out of default, you may still have a Defaulted status from the loans in the payment history section of your credit report. The Fresh Start program erases that status from your credit report.

[@PDXenvy]

My transunion is still showing all of my late payments for my student loans. Experian and equifax have them off the record completely and current. Is that something I should expect to fall of of transunion or am I going to have to dispute that?

[@EscapeStudentLoanDebt]

If you used Fresh Start to get out of default then the Department of Education should contact all three bureaus to correct the loan status. Not sure how long you've been out of default, but if it's been longer than a few months and it's still showing on your credit I would file a dispute. It won't harm your credit to do so, and it puts the burden on the credit bureau to investigate it. Just make sure when you file the dispute you send in proof you were a part of Fresh Start

[@beejay4397]

*Given the recent SCOTUS decision, this program_ appears to be another pipe dream created by Biden's incompetent administration.* *If the Fresh Start measure was legit, the government could simply have all defaulted student loans deleted from CAVIRS without you having to negotiate and hope the collection agency deletes the default.*

[@PDXenvy]

@@EscapeStudentLoanDebt much appreciated!

[@johnwork7329]

Does this remove collection fees that have been included in your balance?

[@EscapeStudentLoanDebt]

I would verify with your loan servicer, but typically, removing loans from defaulted status through a rehabilitation can reduce or eliminate the extra collection costs. I would think the Fresh Start program would as well, but since I don't see confirmation on the website, I don't want to tell you something that ends up being incorrect.

[@lisagrace9026]

hi i want to do fresh start but my original loan was 26000 i was making payments got laid off made partial payments they consider that delinquent so therefore default interest added so as of today my loan is 109000 dollars will they do anything with the interest because if not its just not worth it i make 20.00 an hour i want to pay but i will never pay that off ever

[@EscapeStudentLoanDebt]

Hi Lisa. I doubt there's anything that can be done about the interest, but it is still worth it to do the program and sign up for an income driven repayment plan. If you do, they could give you credit towards forgiveness for a few years, and if your income is low, you could potentially qualify for $0 payments under Income Driven Repayment, which still counts towards forgiveness as well. I know it sucks, but I HIGHLY encourage you to push through and not leave them as is. The consequences for defaulted federal student loans never go away if you don't take care of them

[@SpiritCaliber]

My original loans defaulted in 2016 and were switched to a new servicer in 2019. I called to use the fresh start program. They said that loans older than 7 years will not be reported. Is that good or bad payments? Are they set to fall off soon or has the switch impacted that?

[@hillaryandreita1012]

These are great questions, my loan is older than 7 years, I hope he is able to answer them. Also, when I went to apply for Fresh Start it said some credit scores could go up or down, should we still apply, I am confused because a lot of information on line is for defaulted loans under 7 years. Thank you!

[@EscapeStudentLoanDebt]

The late payments won't be reported after 7 years, but you are likely still listed as in default in terms of your FICO score and also your CAIVRS report, which could make you ineligible to receive new student loans, federally backed mortgages and more. So i would still complete the process of cleaning up all loans. There is no statute of limitations on defaulted federal student debt, so there is always the possibility of some consequence

[@EscapeStudentLoanDebt]

see my reply. hope this helps; federal student debt is unique. Late payments fall off of credit reports and scores after 7 years, but the default status doesn't go away unless you take steps like the ones outlined in the video. And yes, there could be a rise or fall in your credit, that would be based on other factors specific to each borrower.

[@Stanley123456890]

How long does it takes to get off your credit to active?

[@EscapeStudentLoanDebt]

Unfortunately there's no set answer. Once you're approved through Fresh Start they remove the default status on their end, but there's no specific timeline for how long it would take for that information to get to each credit bureau.

[@thirdeyereptiles1772]

My student loans are in default since 2019 & I’m attempting to get Fafsa back to attend college. My student loan payment history somehow says I have 70 missed payments (35) for each loan… how is this possible if the account is closed? And how do I get these late payments off of my credit report once I’ve handled my debt?

[@EscapeStudentLoanDebt]

Hi! There's a couple issues at play 1. Even when you have default status removed from your federal student loans, the late payments remain for up to 7 years following each missed payment. There's no way around that other than waiting for the time to pass (to my knowledge). 2. You said the account was closed but they're in default? If you still have defaulted loans you can get that status removed by A. Doing the fresh start program, B. Doing loan rehabilitation, C. Consolidating the defaulted loans or D. Paying them off. Any of those options should make you eligible to receive new loans