“How to Benefit from the Fresh Start Program for Federal Student Loans”

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What Is Fresh Start?

The Fresh Start program, introduced in April 2022, is a temporary initiative designed to assist federal borrowers with defaulted student loans. This program offers a variety of benefits, some of which are automatic, but to fully leverage all the advantages, including the restoration of certain benefits, you need to apply.

Who Qualifies for Fresh Start?

Eligibility for the Fresh Start program is extended to those with federal student loans that were in default when the student loan payment pause began in March 2020. Even if you have rehabilitated your loans since then, you can still qualify for the program’s benefits.

How to Get out of Loan Default With Fresh Start

While some benefits of the Fresh Start program are automatic, they are temporary unless you enroll. Here are the steps to make these benefits permanent:

1. Apply for the Program

You can apply for the Fresh Start program in three ways:

• Online: Log in to your account at myeddebt.ed.gov.
• Phone: Call the Education Department at 800-621-3115 (877-825-9923 TTY).
• Mail: Write to P.O. Box 5609, Greenville, TX 75403, including your name, Social Security number, date of birth, and a statement requesting to use Fresh Start to bring your loans back into good standing.

The process takes about 10 minutes online or over the phone, and roughly four to six weeks to transfer your loans to a new federal loan servicer.

2. Enroll in a Repayment Plan

After getting out of default, choose a repayment plan. Most Fresh Start enrollees opt for an income-driven repayment plan, which can reduce monthly payments significantly.

3. Make On-Time Payments

Once your loans are ready, set up automatic payments to ensure timely payments. The Biden Administration has provided an “on-ramp” to repayment through September 2024, so missing a payment during this period won’t result in delinquency or default, but late payment charges may still apply.

Should You Apply for the Fresh Start Program?

If you defaulted on your federal student loans before March 2020, you are already benefiting from the Fresh Start program. However, these benefits are temporary unless you enroll. Applying for the program is advisable unless you plan to pay off your loans in full by September 2024. The application process is quick, taking roughly 10 minutes.

Monitor Your Credit to Track Your Progress

Check your credit score and report to see how your student loans are being reported. Continue to monitor your credit as you work to get back on track with your student loans, paying attention to how your actions impact your credit score over time.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We are here to assist you with the best mortgage solutions tailored to your needs.

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