On Jul. 13, CFPB reported credit changes from Fresh Start program.
CFPB issued blog on Fresh Start program, credit reporting changes to student loans.
Background
In 2022, Fresh Start started, allowed eligible defaulted loans to be reported as current on credit reports until one year after the COVID-19 federal payment suspension ends.
During that period, borrowers can make payment arrangements to maintain program benefits, like payment plan arrangement, loan forgiveness and deferment relief.
Fresh Start Program
A review of the program found that majority of defaulted federal loans are no longer on borrowers’ credit records because the loans defaulted more than seven years ago.
Affected borrowers likely live in high-poverty areas, have other accounts in collection, have low credit scores, though many scores increased by 50 points, most remain low.
Jul. 15, 2024 CT BANK Fresh Start Deadline
On Jul. 15, 2024, CT BANK issued a reminder that the Fresh Start deadline is Sep. 30.
To claim the full benefits of Fresh Start and get out of default, defaulted borrowers must sign up for Fresh Start using one of the free online application methods.
