Yes, but generally not while the loan is still in default. Federal Student Aid says defaulted loans cannot be enrolled in an income-driven repayment (IDR) plan, and Public Service Loan Forgiveness (PSLF) is for eligible Direct Loans that are not in default. You must first resolve the default, then meet the separate requirements of the forgiveness program. Getting out of default does not, by itself, forgive the debt.
What default means for forgiveness
For the main federal forgiveness routes—IDR discharge and PSLF—default is a barrier while it continues. Federal Student Aid states that defaulted loans are not eligible for any IDR plan. PSLF is limited to eligible Direct Loans that are not in default.
Resolving default can reopen a path to repayment and, if you meet all other requirements, forgiveness. Your loan type, repayment plan, employment, and qualifying-payment history still matter. Do not assume that payments made before default, during rehabilitation, or toward a consolidation loan will count toward a particular forgiveness program; payment credit is governed by that program’s rules and your account history.
Ways to get out of default
Federal Student Aid identifies rehabilitation and Direct Consolidation as options. They differ in payment requirements, timing, and possible effects on your debt and credit history. Confirm your eligibility and terms with your loan holder or the Department of Education’s Default Resolution Group before choosing.
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| Option | What it involves | Key trade-offs |
|---|---|---|
| Rehabilitation | Sign a rehabilitation agreement and make nine on-time voluntary payments. For Direct Loans and FFEL loans, the payments are made during ten consecutive months; for defaulted Perkins loans, nine consecutive payments are required. The standard rehabilitation payment is described by Federal Student Aid as 15% of annual discretionary income divided by 12. Ask your loan holder or the Default Resolution Group for the amount and available arrangements. (Federal Student Aid, rehabilitation FAQs) | After successful rehabilitation, default status is removed and collections stop. It generally takes multiple months to complete the required payments. (Federal Student Aid, rehabilitation FAQs) |
| Direct Consolidation | Eligible defaulted federal loans may be consolidated into a Direct Consolidation Loan. Federal Student Aid’s current IDR FAQ describes consolidating defaulted loans and agreeing to repay the new loan under the Repayment Assistance Plan (RAP) as an option. Confirm that this applies to your loans and situation before proceeding. | Federal Student Aid says consolidation may be faster than rehabilitation, but collection costs and capitalized interest can increase the amount owed, and the default record may remain on your credit history. (Federal Student Aid, default FAQ) |
Fresh Start is no longer available
The federal Fresh Start initiative ended on October 2, 2024. It is not an option for new enrollment.
Forgiveness options after default is resolved
Public Service Loan Forgiveness
PSLF can forgive the remaining balance on eligible Direct Loans after 120 qualifying monthly payments while you work full-time for a qualifying government or nonprofit employer and satisfy the program’s repayment and payment rules. Rehabilitation or consolidation does not automatically make payments qualifying or complete the PSLF requirements.
FFEL and Perkins loans are not themselves eligible for PSLF, though eligible loans may be consolidated into a Direct Consolidation Loan. Federal Student Aid says consolidation after September 1, 2024 can use a weighted average of qualifying payment counts on included Direct Loans. It encourages borrowers to certify qualifying employment before consolidating. Check your loan mix and payment history first, since consolidation can affect payment credit.
Income-driven repayment discharge
Once a loan is no longer in default, you may be able to enroll in an IDR plan and work toward discharge after the plan’s qualifying repayment period. Eligibility and terms depend on factors such as loan type and disbursement date. Federal Student Aid’s current IDR guidance lists RAP and legacy plans with different eligibility rules; it says PAYE and Income-Contingent Repayment (ICR) are to retire no later than July 1, 2028. Because plan rules can change, check the current official IDR guidance for your specific loans rather than relying on an older plan comparison.
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Other federal discharges and relief
Separate programs may provide relief for borrowers who meet their own criteria. Federal Student Aid lists borrower defense to repayment, closed-school discharge, Teacher Loan Forgiveness, total and permanent disability discharge, and military-related benefits among the possibilities. Default alone does not establish eligibility for any of these programs.
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How to check your next step
- Sign in to your StudentAid.gov account and check which loans are federal, their loan types, and their current status. PSLF eligibility and repayment options depend in part on this information.
- Contact your loan holder or the Department of Education’s Default Resolution Group to ask which default-resolution options are available, what each would require, and how it may affect your balance and credit history.
- Before consolidating, review your loan mix and payment history, especially if you are pursuing PSLF. Federal Student Aid encourages borrowers to certify qualifying employment before consolidation.
- After default is resolved, check current Federal Student Aid guidance and your account for the repayment plan and forgiveness requirements that apply to your loans. Use official StudentAid.gov channels, your loan holder, or the Default Resolution Group for help; a paid debt-relief company is not required to apply for these federal options.
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