Federal Family Education Loan Program (FFELP)

Fresh Start Opt-in Information

Fresh Start is a one-time, temporary program from the U.S. Department of Education (ED) that offers special benefits for borrowers whose federal loans defaulted prior to 03/13/2020. Fresh Start automatically gives you some benefits, such as restoring access to federal student aid (loans and grants), credit reporting as “current” to credit bureaus, collections relief, and more; however, you need to act to claim the full benefits of Fresh Start and get out of default. To request opting-in to Fresh Start, complete our online form. We’ll email you to let you know if you qualify once we receive your request.

For more information about the Fresh Start program, review the Fresh Start Fact Sheet created by Federal Student Aid.

Why are my CFI or Nelnet loans at NCSEAA?

The North Carolina State Education Assistance Authority (NCSEAA) is the state student loan guaranty agency for loans originally made by College Foundation, Inc. (CFI) and serviced by either CFI or Nelnet. For most student loans, you will default if you have not made a payment to CFI or Nelnet in more than 270 days. If you default, CFI or Nelnet will transfer your loans to NCSEAA for collections. Default can have several long-term financial consequences.

If you have a Federal Family Education Loan (FFELP), we can work with you to set up a payment plan, even if your loans have already defaulted.

Payment Options

There are three options available to remove your Federal Family Education Loan (FFELP) from default: payment in full, loan rehabilitation, or loan consolidation:

Payment in Full

You can contact NCSEAA to obtain a pay-off quote for a lump-sum payment, or to enter into a satisfactory monthly repayment plan.

• Federal regulations require that we assess collection charges on your account. Currently federal rules have set the amount of these fees to 24.34% of your outstanding principal and interest.

• Collection costs are prorated as a portion of each payment that we receive for principal and interest. Payments are applied first towards collection costs owed, then to interest accrued, and, lastly, to the loan principal.

Loan Rehabilitation

You may have the opportunity to reverse the negative effects of default and return your loans completely to good standing through participation in our Loan Rehabilitation Program.

• NCSEAA’s Loan Rehabilitation Program enables borrowers with defaulted federal student loans to have their loans removed from default through affordable monthly payment plans and to return the loans to good standing. Rehabilitation is a one-time opportunity. Please contact us at 800-544-1644 to set up a repayment plan. If you do not qualify for Loan Rehabilitation, contact us to learn about other repayment options.

Loan Consolidation

Another possible way to remove loans from default is through a process called “loan consolidation”.

• If you consolidate, the defaulted NCSEAA loans that you consolidate would be considered to be paid in full and you would repay your new, non-defaulted consolidation loan directly to the U.S. Department of Education.

• A fee of 18.5% of the outstanding principal and interest would be added to your debt at the time of consolidation. For more information on this program, visit the Direct Loan internet site https://studentloans.gov or call the Direct Loan office at 1-800-557-7392.

• You are not eligible for loan consolidation if NCSEAA holds a judgment against you for the loans that you are attempting to consolidate or if you were not eligible to receive these loans.