A Biden administration program is giving nearly 7.5 million borrowers behind on their student loans an opportunity to catch up on their debts. It includes pausing collections for a year.

Under the Fresh Start Initiative, a lifeline is being offered to eligible student loan borrowers who are in default, according to the Department of Education. It restores eligibility for federal student aid so they can complete their credential or degree.

Fresh Start stops default loan collections, continuing the previous COVID-19 payment pause, so tax refunds won’t be withheld, wages will not be garnished, Social Security payments (including disability benefits) won’t be withheld and collection calls will not be made.

The initiative stops reporting of the student loan defaults through the government credit reporting system, making borrowers in default eligible for other government-backed loans like mortgages.

And if borrowers in the Fresh Start program go into default again and want to rehabilitate their loans, they can.

People who have student loans in default this year will be able to have their loans reported to credit reporting agencies as being “current” rather than “in collections.” An Income-Driven Repayment plan benefit will also base monthly student loan payments on income and family size, offering another level of relief for people struggling to repay student loans.

When borrowers enter the Fresh Start program they leave loan default status. That, in turn, allows them to apply for the Public Service Loan Forgiveness program.

The Education Department said in a statement that it will reach out to people with student loans in coming months with information about what they need to do to take advantage of the Fresh Start initiative.

Loans eligible for Fresh Start are defaulted loans under the William D. Ford Federal Direct Loan Program, Federal Family Education Loan Program and Perkins Loans held by the Department of Education.

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