Student Loan Forgiveness: Biden’s ‘Fresh Start’ Plan Deemed $34 Billion Success — How It Benefits Borrowers

2 min Read

Ukrainian President Press Office / UPI / Shutterstock.com

President Biden’s Fresh Start program has placed $34 billion worth of delinquent or defaulted student loan accounts into “current” status.

According to the New York Federal Reserve’s Q4 2022 Household Debt and Credit report, the initiative has resulted in less than 1% of all student debt being delinquent or in default.

Fresh Start Program Details

The Fresh Start program will run for one year after the COVID-19 payment pause ends (currently no later than June 30, 2023). As an eligible borrower, you can receive the following benefits:

However, you must choose to participate in the program by making a repayment arrangement during the Fresh Start period. If you don’t, you’ll lose access to these perks.

Save for Your Future

Your loans must also be eligible for the program. Eligible loans include defaulted Direct Loans, Federal Family Education Loans (FFEL) and Perkins Loans held by the Department of Education.

Strategically Prepare for Repayment

Unless all of your student debt gets forgiven, you’ll soon need to re-factor loan payments into your budget. But you don’t have to sacrifice fun to become debt-free. Instead, consider adding a “lifestyle” line item to your spending plan. Then, use those funds to cover coffee, takeout, event tickets and other discretionary purchases.

More From GOBankingRates