KANSAS CITY, Mo. — The deadline for a program that could help millions of people across the country is coming up in exactly one week.
The Fresh Start program has been around for about two years, but it's set to end Sept. 30.
Fresh Start is for anyone who has defaulted on a federal student loan. In Missouri, that means 130,000 people.
It's automatically been protecting borrowers from creditors and wage garnishment, but unless they manually enroll within a week, those protections go away.
Fresh Start was born during the pandemic when the U.S. Department of Education wanted to give borrowers more breathing room during a financially untenable time.
So, if you didn't pay your student loans for a year, you weren't being reported as "in default," which meant it didn't tank your credit score. You also would not be disqualified from other loans and wages were not garnished.
Before the pandemic payment pause, around 7.5 million people with student loans were in default. That pause is long gone now, but the number of borrowers in default is still around 5 million nationwide.
Now, the U.S. Department of Education is directing people toward Fresh Start before the program expires.
"So they've already been receiving these automatic benefits since 2022," said Rich Williams with the U.S. DOE. "That means we weren't reporting them as in default to credit reporting agencies, we weren't collecting on their student loans. But if they don't enroll by the end of the month, after this program ends, we are then required to report them again as in default."
The program:
- Allows borrowers in default to finish school by keeping them eligible to get more student loans before paying their prior debt off.
- Keeps access to flexible payment plans based on income levels.
- Helps buy time by keeping access to deferment or forbearance.
- Keeps eligibility for loan forgiveness programs.
Williams said it only takes a few minutes to sign up and get enrolled.
You can do so by clicking here.
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KSHB 41 reporter Grant Stephens covers stories involving downtown Kansas City, Missouri up to North Kansas City. Share your story idea with Grant.
