Education Dept. extends deadline for defaulted student loan borrowers to get current

The U.S. Department of Education has extended the deadline for its Fresh Start program for defaulted student loan borrowers until Wednesday morning, according to an agency spokesperson.

Borrowers who apply for the limited opportunity will be returned to good standing on their loans, and able to avoid the impact of delinquency and default.

The original deadline for the Fresh Start program was Sept. 30, but an issue on their website led the department to decide to give borrowers until Wednesday at 3 a.m. ET to apply for it, the spokesperson told CNBC.

The 12-month “on-ramp period” still expires on Sept. 30. Since the pandemic-era pause on federal student loan payments ended, the Education Department has shielded borrowers from the worst consequences of missed payments, including collection efforts and negative credit reporting.

Borrowers interested in applying for the Fresh Start program can learn more at StudentAid.gov.

There were around 7.5 million federal student loan borrowers in default, the Education Department said in 2022, when it launched its mulligan program.

That grim figure led to comparisons with the 2008 mortgage crisis.

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