DENVER (KDVR) — More than 90,000 Colorado residents — and other borrowers around the country — can take their federal student loans out of default under the U.S. Department of Education’s temporary Fresh Start program.
The deadline to apply is Monday, Sept. 30.
“I struggle financially, so having that option is good to have,” said one former student.
NewsNation affiliate KDVR spoke with those who were able to pay back credit student loans, allowing them to lead successful lives.
“I’ve been through school twice now and I agree that it is hard as a student, that you’re trying to work through everything you’re trying to make a better life,” said one former student.
U.S. Undersecretary of Education James Kuvaal told KDVR that many borrowers fell behind on payments after the pandemic. Since October 2023, the Department of Education has successfully helped millions of federal student loan borrowers transition back to repayment, but more than 5 million have federal student loans in default.
“Our system is really very heavily financed by debt, and it’s not just elite education or law schools; people go into debt to go into community college to become hairstylists, a massage therapist,” he said.
Kuvaal said addressing the issue of federal student loan debt is a priority.
“We all have a stake in making college more affordable and taking on the student debt problem,” he said.
The Fresh Start program provides income-based payment plans, a chance to qualify for loan forgiveness programs, removal of a default loan from credit reports and a chance to requalify for student aid, in addition to other benefits.
Starting Oct. 1, the department may be required to report delinquent loans to credit bureaus and collect what’s due through wage garnishment and withholding tax refunds or social security benefits. For more information, visit the Federal Student Aid website.