Fresh Start Guidance for Renewed State Financial Aid Eligibility

Through a series of Dear Colleague Letters, the U.S. Department of Education has provided defaulted Direct Loan and FFEL Program loan borrowers who defaulted on their federal student loans with the opportunity to regain eligibility for Title IV federal student aid.

Consistent with federal guidance, HESC will provide renewed eligibility for New York State financial aid to borrowers whose loss of Title IV eligibility was due solely to a default on their loan as follows:

  1. Students with federal student loans that defaulted on or after March 13, 2020. HESC has received confirmation that FFELP loans (pursuant to DCL Gen 21-03) that defaulted on or after March 13, 2020 are immediately eligible for additional Federal Student Aid. Furthermore, the CARES Act provisions eliminated the default status of all Direct Loans with a defaulted status on or after March 13, 2020, making such borrowers immediately eligible for additional Federal Student Aid.

    As a result, all borrowers with loans in default statuses on or after March 13, 2020, are immediately eligible for renewed State aid.

    Please note that schools must maintain records for Title IV purposes in accordance with federal guidance and requirements; no other record keeping is required for State financial aid purposes.

  2. Students with federal student loans that defaulted prior to March 13, 2020. The "Fresh Start" Program applies to FFEL Loan and Direct Loan borrowers who defaulted prior to March 13, 2020. HESC has received confirmation that such borrowers must either (i) sign an acknowledgement to regain Title IV eligibility or (ii) both sign an acknowledgement and request the transfer of their loan to a non-default student loan servicer (Nelnet) to regain Title IV eligibility.

    As a result, all borrowers with loans in default statuses prior to March 13, 2020, are eligible for renewed State aid upon signing an acknowledgement to regain Title IV eligibility during the Fresh Start period.

    Please note that schools must maintain records for Title IV purposes in accordance with federal guidance and requirements; in addition, schools must complete a Fresh Start Form for each student loan borrower who defaulted prior to March 13, 2020, and who has signed the acknowledgment. The 2022-23 Fresh Start Form and/or the 2023-24 Fresh Start Form should be emailed to This email address is being protected from spambots. You need JavaScript enabled to view it. so that the default status of students seeking renewed State financial aid eligibility can be cleared.
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