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Joe Biden’s “Fresh Start” Program For Student Loans in Default.


If you are one of the millions of Americans who have defaulted on your student loans, you may be feeling overwhelmed and hopeless.

You may feel like there is no way to fix the situation and that you will be stuck with a delinquent or defaulted loan for the rest of your life.

However, there is good news! The fresh start program, introduced by Vice President Joe Biden, provides a way for borrowers in default to eliminate the negative impact of delinquency and default from their credit report.

In this article, we will discuss the fresh start program by the Department of Education.

How long are student loans deferred due to covid 19?

President Joe Biden announced that he will extend the suspension of most federal student loan payments until the end of August 2022, giving borrowers additional time “to get back on their feet after two of the toughest years this nation has ever seen.”

Fresh Start Program for Delinquent and Defaulted Student Loans

The deadline for the extension, which was set to expire on Aug. 31, is far shorter than what many Democrats had requested.

National Debt Relief is rated #1 for debt consolidation

A number of Democrats had urged the administration to continue the pandemic relief for borrowers until at least the end of 2022, which would allow payments not to resume before the midterm elections in November.

“That additional time will assist borrowers in achieving greater financial security and support the Department of Education’s efforts to continue improving student loan programs,” Biden said, adding his administration would provide “additional flexibilities and support for all borrowers.”

Among the steps outlined in the plan are a far-reaching strategy to help millions of federal student loan defaulters come out of default.

The administration will allow “all borrowers with paused loans to receive a ‘fresh start’ on repayment by eliminating the impact of delinquency and default and allowing them to reenter repayment in good standing,” the Education Department said in a separate statement on Wednesday.

Operation Fresh Start

The Biden administration is examining a plan to automatically remove millions of borrowers from default on their federal student loans, which officials had previously referred to as “Operation Fresh Start.”

For months, administration officials have been working through the specifics of that idea. The talks have been complicated, in part, by how the Education Department plans to finance the program, according to several people informed with the discussions.

Who will qualify for the Student Loan Default fresh start Program

According to previously published Education Department statistics, roughly 8 million borrowers are in default on those sorts of federal loans.

The Education Department acknowledged to POLITICO that the defaults of all borrowers covered by the pandemic-related pause would be erased automatically.

Borrowers who are in default on federally-guaranteed student loans made by private lenders and those owing federal student loans directly held by the Education Department are included.

Fresh Start Rehabilitation Program for Defaulted Student Loans

The rehabilitation program for defaulted student loans is a process whereby the borrower agrees to make nine voluntary, full, and timely monthly payments within ten months.

Once the rehabilitation period is successfully completed, the default status is removed from the borrower’s credit report, the loan rehabilitation agreement is recorded on the borrower’s credit report, and the collection of the loan resumes.

The rehabilitation program may be an option for a borrower who is unable to repay his or her defaulted student loan in full but can make monthly payments.

Getting Help with Fresh Start Rehabilitation Program

If you are considering this option, you should contact your loan holder or student loan advisor as soon as possible to discuss your rehabilitation options.

Can’ afford monthly payments

Borrowers who are struggling to make their monthly student loan payments have a few different options available to them.

How soon can you be debt free?

One option is to extend the repayment period, which will lower the monthly payment but increase the total amount of interest that is paid over the life of the loan.

Another option is to switch to an income-based repayment plan, which ties the monthly payment to the borrower’s income. This can be a helpful option for borrowers who are facing temporary financial hardship.


Borrowers may also be able to qualify for a deferment or forbearance, which allows them to temporarily stop making payments on their loans.

Borrowers should carefully consider all of their options before making any decisions, as each option can have different implications.