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Home » For Borrowers » Dealing with Student Loan Debt » Default & Debt Collection » Restoring Federal Student Aid

Restoring Federal Student Aid

Under the limited Fresh Start program, all borrowers with eligible defaulted student loans are now automatically eligible for additional federal financial aid through the end of August 2024. This means that borrowers can apply for federal student aid right now through the Free Application for Federal Student Aid (FAFSA) form.

Additionally, if a borrower applies for and receives new financial aid under the Fresh Start initiative, the Department of Education will then transfer the borrower’s eligible defaulted student loans to a new loan servicer. This will get the loans out of default, remove the default from the borrower’s credit reports, and allow the borrower to remain eligible for financial aid after the Fresh Start period ends. Find more information on our Fresh Start page.

Usually, when you go into default, you lose your eligibility for additional financial aid from the federal government. This means that if you go back to school, you can’t get federal loans or grants to help pay for your education.

If you want to get access to financial aid again, you will have to look into ways to get your loans out of default. If you cannot get your loans out of default, you may also be able to become eligible for federal financial aid again if you make six monthly payments on your defaulted loans. Your loan holder will work with you to set a reasonable and affordable amount for these monthly loan payments. After you make these six payments, you will become eligible for federal student aid again, but your loan will still be in default.  For more information, see the Department of Education’s website.

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The National Consumer Law Center (NCLC) shares stories about borrower issues with lawmakers and policy advocates on a regular basis. Share your story and help us fight to make the law better for borrowers!


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