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Federal Student Aid Eligibility for Borrowers with Defaulted Loans — “Fresh Start” Initiative

This Federal initiative is an opportunity for those students currently in default on their Federal student loans to get another chance to receive Federal aid and complete their education. The goals of this initiative are to increase the long-term prepayment success of borrowers with defaulted federal student loans and provide substantial benefits to borrowers over the coming months (up to 1 year after the payment pause ends). Outreach to these borrowers would begin in October 2022 by the Department of Education. Please reference this fact sheet for your questions [pdf].

Fresh Start is a temporary program from the U.S. Department of Education (ED) that offers special benefits for borrowers with defaulted federal student loans. Fresh Start ends Sept. 30, 2024.

Students would be eligible for the following aid programs:

  • Federal Pell grant
  • Federal SEOG (Supplemental Educational Opportunity Grant) grant
  • Federal Work Study
  • Federal Student loans

To learn more, feel free to check it out here for more details: https://studentaid.gov/announcements-events/default-fresh-start

Under the “Fresh Start” initiative students would still be considered in default on student loans until they are transferred to a non-default servicer. Until the default status is resolved by working with the loan server, students are not eligible for state scholarships/grants. Once a student’s information shows no defaulted Federal loans on the National Student Loan Data System (NSLDS), no defaulted Federal loan on the updated Free Application for Federal Student Aid (FAFSA) sent by the Department of Education, or if the institution receives a default clearance letter that does not reference the “Fresh Start” initiative, then that student may qualify for state scholarships/grants.

What does this mean to me as a current or prospective Cornish Student?

Beginning August 17, 2022, Cornish College of the Arts will review those with defaulted Federal loans on newly uploaded FAFSAs and notify the student if we need any documents from them including a signed acknowledgment. Students that have defaulted Federal loans and whose FAFSA was processed by Cornish prior to August 17 can contact our Financial Aid Office to request a review.

SAVE Repayment Plan

The Saving on a Valuable Education (SAVE) Plan is the newest income-driven repayment (IDR) plan. Like other IDR plans, the SAVE Plan calculates your monthly payment amount based on your income and family size. In addition, the SAVE Plan has unique benefits that will lower payments for many borrowers.

The SAVE Plan replaced the Revised Pay As You Earn (REPAYE) Plan. Borrowers who were on the REPAYE Plan automatically get the benefits of the SAVE Plan.

  • The SAVE Plan is an IDR plan, so it bases your monthly payment on your income and family size.
  • The SAVE Plan lowers payments for almost all borrowers compared to other IDR plans because your payments are based on a smaller portion of your adjusted gross income (AGI).
  • The SAVE Plan has an interest benefit: If you make your full monthly payment, but it is not enough to cover the accrued monthly interest, the government covers the rest of the interest that accrued that month. This means that the SAVE Plan prevents your balance from growing due to unpaid interest.
  • The SAVE Plan gives borrowers who originally borrowed $12,000 or less forgiveness after as few as 10 years.
  • More elements of SAVE will go into effect in summer 2024 and will lower payments even more for borrowers with undergraduate loans.

To learn more, feel free to watch the official video on the SAVE Plan here: https://www.youtube.com/watch?v=eSlDyy0Kef0&t=10s

Apply for the SAVE Plan here: https://studentaid.gov/idr/

Updates on 2024-2025 FAFSA

Hello and happy new year everyone!

The 2024-25 FAFSA can be accessed at https://studentaid.gov/h/apply-for-aid/fafsa.  

Students as well as contributors are required to be signed up for a FSA ID. Please be sure to do so, if you have not done so already.  https://studentaid.gov/fsa-id/create-account/launch.

As we are now receiving FAFSA's, we will begin making Corrections June 30th 2024. If you have any questions, feel free to reach out to the Financial Aid Office.  We can be reached at finaid@cornish.edu. As we continue to receive further guidance, we will continue to send updates. We appreciate your patience with the changes to the financial aid process.

Lastly, here is a helpful site that will provide answers to documents needed to fill out the FAFSA and where to get help:  https://studentaid.gov/apply-for-aid/fafsa/filling-out.