Student loan payments, wage garnishments, and income tax refund offsets were halted back in 2020 during the COVID-19 pandemic.
But as those pandemic-era borrow relief programs are coming to a end, student loan borrowers will now have to resume payments or risk default and collections, including tax-refund offsets.
However, the U.S. Department of Education has a program named Fresh Start that helps borrowers avoid student loans taking their 2024 income tax refund.
The collections relief you’ve gotten during the COVID-19 payment pause continues during Fresh Start. You’ll continue to get the following collections relief:
Tax refunds (and child tax credits) will not be withheld.
Wages will not be garnished.
Social Security payments (including disability benefits) will not be withheld.
Collection calls will not be made.
The student loans eligible for the Fresh Start program are:
Defaulted William D. Ford Federal Direct Loan (Direct Loan) Program loans
Defaulted Federal Family Education Loan (FFEL) Program loans
Defaulted Perkins Loans held by ED
The student loans NOT eligible for the Fresh Start program are:
Defaulted Perkins Loans held by schools
Defaulted Health Education Assistance Loan Program loans
Student loans remaining with the U.S. Department of Justice for ongoing litigation
Direct Loans that default after the end of the COVID-19 student loan payment pause
FFEL Program loans that default after the end of the COVID-19 student loan payment pause
How To Enroll in Fresh Start to Get Out of Default
To use Fresh Start to get out of default, you must contact your loan holder. If your loans are held by ED, you can contact us using one of the three methods below. If your loans are held by a guaranty agency, you’ll need to call that agency. Find contact information for guaranty agencies.
If you don’t know who holds your loans, call 1-800-621-3115 (TTY 1-877-825-9923).
