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Title IV Aid Eligibility for Students with Defaulted Loans

“Fresh Start” Initiative

Yesterday, ED released a Dear Colleague Letter with details of its Fresh Start Initiative which restores Title IV Aid eligibility to students who defaulted on federal loans prior to the start of the pandemic (March 13, 2020). You can find an overview of the program here.

Through this program, borrowers who are currently in default on eligible loans will qualify to borrow new loans. Once new loans disburse, the defaulted loans will be transferred to a non-default servicer and the default status will be removed.

Who Qualifies?

Students who defaulted on Title IV loans in any of the programs below, prior to March 13, 2020.

  • William D Ford Federal Direct Loan Program
  • Federal Family Education Loan (FFEL) Program including Federal Insured Student Loans (FISL)
  • Federal Perkins Loans that are serviced by ED’s Debt Management and Collections System (DMCS)

How to clear the C Code

Instructions on how to clear the C-Code with FAS have been sent to all clients via email communication. The same instruction has also been posted on FASLine for reference.

 

Please feel free to reach out to the Compliance Team or C Code Team with any questions.

 

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