EDCAP Home > Repayment Guide Overview > Fresh Start for Defaulted Loans
If your federal loans are in default, there is a valuable opportunity available to you called Fresh Start. This initiative aims to help you bring your loans back into good standing, repair your credit, and avoid potential consequences such as wage garnishment, tax refund interception, or offsetting of your Social Security retirement or disability benefits.
To benefit from the Fresh Start program, follow these essential steps:
- Contact your debt collector: Contact your debt collector (in most cases this will be the Default Resolution Group at 1-800-621-3115) or apply on your myeddebt.ed.gov account. Let them know you would like to take advantage of Fresh Start and request that your loans be transferred to a non-default servicer and enroll in a long-term repayment plan after which the default history will be removed from your credit reports.
Note: Some defaulted FFELP loans may be held at a Guarantee Agency. If you are not sure where your defaulted loans are held, contact Default Resolution Group at the above-mentioned number.
- Pursue further education: If you intend to continue your education, consider applying for the Free Application for Federal Student Aid (FAFSA) and enroll in school at least half-time. By doing so, your loans can be transferred to a non-default servicer and placed in an in-school deferment, ultimately resulting in the removal of the default history from your credit reports.
Additional benefit for those pursuing PSLF or IDRF: If you use Fresh Start to bring your loans out of default, you will get credit towards PSLF or IDRF for the time spent in default during the payment pause (March 13, 2020, until the loans come out of default, or the payment pause ends).
Important Reminder: You have until one year after the payment pause ends to “opt-in” for the Fresh Start initiative. Collection activities for eligible loans will remain suspended until the end of the Fresh Start Initiative, providing you with a window of opportunity to rectify your defaulted loans.
By taking advantage of Fresh Start, you can regain control of your finances, improve your creditworthiness, and pave the way for a brighter financial future.
Other helpful resources within this guide: