Get a Fresh Start Now: 6 Benefits for Loans in Default

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Do you have federal student loans in default? If so, don’t miss out on the Fresh Start program. This temporary program (ending Sept. 30, 2024) allows you to get out of default more easily and more quickly than normal methods. Over 6 million borrowers are eligible as of January 2024. Read on to learn about the ways Fresh Start could benefit you and how to sign up ASAP to take advantage of these benefits.


Ability to enroll in an income-driven repayment plan to drastically lower your payments

Benefits of using Fresh Start to become eligible for the SAVE repayment plan include lower monthly payments and decreasing the amount you’d pay over the lifetime of the loan because your balance won’t grow due to interest.

If you use Fresh Start to get out of default, you’ll become eligible for an income-driven repayment (IDR) plan.

Under an IDR plan, your monthly payment amount can be as low as $0. That’s because on an IDR plan, your monthly payment is based on how much money you make (income) and your family size.


Regain eligibility for federal student loan forgiveness (and advance your progress toward it!)

Defaulted loans are not eligible for some student loan forgiveness programs. But if you take advantage of Fresh Start, you’ll get out of default status and regain the ability to apply for all forgiveness programs, including Public Service Loan Forgiveness. We usually recommend you sign up for an IDR plan if you’re getting out of default because future payments will count toward IDR Loan Forgiveness. You can get your loans forgiven after a set number of years on an IDR plan (10–25 years depending on the plan and your total loan debt).

Enroll in Fresh Start by Sept. 30, 2024, to get credit toward forgiveness.

Signing up for Fresh Start can help you get closer to (or even achieve) IDR Loan Forgiveness or Public Service Loan Forgiveness.

If you enroll in Fresh Start by Sept. 30, 2024, we’ll treat your loans as having been in repayment for the duration of the COVID-19 payment pause, beginning March 2020, like other borrowers. That means those months may count toward your IDR or Public Service Loan Forgiveness, just by signing up for Fresh Start!


Remove default from your credit report

When you use Fresh Start, your loans will remain “current” status on your credit report.

In some cases, this can improve your credit rating. Improved credit can make it easier for you to afford living expenses as you become eligible for lower interest rates and more favorable credit terms. Learn more about how Fresh Start is helping people’s credit.


Avoid any future wage garnishment.

Due to Fresh Start, wages aren’t being garnished right now. Prior to the limited time Fresh Start Benefits, if you have a loan in default, the government may take money from your wages to pay that loan. This is called wage garnishment. Typically, up to 15% of your disposable income may be taken.

Don’t wait until benefits end!

Take advantage of the Fresh Start to get your loans out of default and avoid the risk of having your wages garnished in the future.


Federal benefit payments will not be withheld.

If you have a loan in default, the government can also withhold money from your tax refund, Social Security benefits, or other federal payments. Because of Fresh Start, this withholding isn’t happening right now. But you can avoid it long-term by using Fresh Start to get your loans out of default.


Regain eligibility for federal student grants and loans.

62% of those with student loans in default hadn’t completed their academic program. If you use Fresh Start to get your loan(s) out of default, you’ll regain the ability to get federal student aid, such as grants or loans. Completing your degree may increase your potential income and help you boost your financial stability long-term.

Wage and salary workers with at least a bachelor’s degree make on average $699 more each week based on U.S. Bureau of Labor Statistics data from the second quarter of 2023.

Sign up ASAP to take advantage of these benefits!

Fresh Start is completely free and works quickly. Normally, to get out of default, you have to either consolidate your loans or rehabilitate them, which can take up to 10 months. But with Fresh Start, you can start getting the benefits of getting out of default with a 10 minute phone call.

How to Sign Up for Fresh Start

If your loans are held by the U.S Department of Education, you can take advantage of Fresh Start in one of the following ways

  1. Phone—Call the Default Resolution Group at (800) 621-3115
  2. Online—Visit and follow the steps below
  3. Mail— Write to P.O. Box 5609, Greenville, TX 75403. In your letter, include your name, social security number, date of birth, and the following: “I would like to use Fresh Start to bring my loans back into good standing.”

If your loans are held by a guaranty agency, you’ll need to call that agency. Find contact information for guaranty agencies or call (800)621-3115 to be redirected to your guaranty agency.

Steps to Sign Up at

  1. Log in to your account.

If you have never logged on before, you can create an account. If you forgot your account info, you can reset your password online. If you continue to have trouble accessing your account, contact DMCS Helpdesk at 1-888-291-2160.

  1. When you’re logged in, you’ll be asked to confirm your contact info.
  2. Once you’re on the “Account Information page,” select “ENROLL” under the “Fresh Start Transfer Information” section.
Screenshot of the myeddebt Account Information page which shows a highlight over the hyperlinked option to enroll in Fresh Start.
  1. Check the ‘I certify that I have read and agree with the disclosure started above’ check box and select the ‘Enroll’ button.

After you complete these steps, you’ll see a Fresh Start enrollment successful message displayed to confirm your enrollment.

How to Get on an Income-Driven Repayment (IDR) Plan

You can’t apply for an IDR plan until we finish processing your Fresh Start enrollment. This may take 4-6 weeks. But once the processing is done, you can sign up for an IDR plan online.

Here’s an estimate of what you would pay under the new SAVE Plan before July 2024.  After July 2024, you can expect your monthly payment to decrease further. Learn more about upcoming SAVE Plan benefits.

Accessible version of table

Don’t worry if your income has changed since your last tax return. The IDR application will show you how to provide updated income information.

Help us spread the word!

Many people may be missing out on an opportunity that would make a big difference in their lives. If you have a friend or family member who you know has a federal student loan in default, share this information with them.