That includes borrowers who owe federal student loans that are directly held by the Education Department as well as borrowers who defaulted on federally-guaranteed student loans made by private lenders. The deliberations have been complicated, in part, by how the Education Department plans to fund the program, according to several people familiar with the discussions.Īn Education Department official confirmed to POLITICO that the agency would be automatically erasing the defaults of all borrowers covered by the pandemic-related pause. POLITICO first reported in October that the Biden administration was looking at plans to automatically pull millions of borrowers out of default on their federal student loans, which officials had internally labeled “Operation Fresh Start.”Īdministration officials have been working through the details on that proposal for months. The administration will allow “all borrowers with paused loans to receive a ‘fresh start’ on repayment by eliminating the impact of delinquency and default and allowing them to reenter repayment in good standing,” the Education Department said in a separate statement on Wednesday. “That additional time will assist borrowers in achieving greater financial security and support the Department of Education’s efforts to continue improving student loan programs,” Biden said, adding his administration would provide “additional flexibilities and support for all borrowers.”Īmong those additional actions is a sweeping plan to pull millions of federal student loan borrowers out of default. ET with our reporter Michael Stratford, Bipartisan Policy Center’s Shai Akabas and a few expert guests. What are the pros and cons of these repeated extensions? What are the proposals for eventually restarting payments? Tune into our Twitter Space today at 4 p.m. The links below have additional information.Join us for a live conversation on student loan payments Department of Education announced the Fresh Start initiative. Visit the link below for updates.ĬOVID-19 Emergency Relief and Federal Student Aid If the debt relief program has not been implemented and the litigation has not been resolved by Jpayments will resume 60 days after that date.
Department of Education is permitted to implement the debt relief program or the litigation is resolved. Payments will restart 60 days later. The student loan payment pause is extended until the U.S. Questions regarding loans in repayment should be directed to your loan servicer or the Default Prevention Unit at 80. Questions regarding your defaulted student loan account should be directed to the collections unit at 80. Loan information including balance, payments, and interest rates.Payment plan options including rehabilitation.The Michigan Guaranty Agency (MGA) student loan portfolio is now fully serviced by Pennsylvania Higher Education Assistance Agency (PHEAA). The link below informs the GAs of their obligations regarding the Federal Family Education Loan (FFEL) Program loans that are in default in accordance with the Fresh Start Initiative.įresh Start Initiative Guidance to Guaranty Agencies (GAs) Federal Student Aid posted Fresh Start Initiative Guidance to Guaranty Agencies (GA).
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