New Student Loan Repayment Rules Could Ease Pressure on Bankruptcy Filers—But Not Yet

Introduction

For many Americans, student loans remain one of the few debts that survive bankruptcy. That’s why the Biden administration’s SAVE Plan—a new income-driven repayment program—generated hope for those struggling with student loans after filing for Chapter 7 or Chapter 13.

But as of mid-2025, that relief is on hold. Due to legal challenges, the Department of Education is not accepting new enrollments in the SAVE Plan, leaving many bankruptcy filers wondering: What now?

In this article, we explain:

What Was the SAVE Plan Supposed to Do?

The SAVE (Saving on a Valuable Education) Plan aimed to overhaul student loan repayment by offering:

For bankruptcy filers recovering on limited income, this plan offered a lifeline—potentially bringing relief even if their loans weren’t discharged.

What’s Happening Now: Legal Block on SAVE

In June 2025, a federal court blocked key components of the SAVE Plan and halted new applications. Here’s what that means:

You can read the Department of Education’s official update here:
https://studentaid.gov/announcements-events/save-plan

How This Impacts Bankruptcy Filers in Washington, PA

If you filed for Chapter 7 or Chapter 13 bankruptcy, and still have federal student loan debt, the pause on SAVE can feel like a setback.

But there are still other tools you can use to manage your loans:

1. Explore Other Income-Driven Repayment Plans (IDRs)

Even though SAVE is paused, other plans are still available:

Visit https://studentaid.gov/idr to compare active plans and apply.

2. Use the Fresh Start Program (If in Default)

If your federal student loans were in default before bankruptcy, you may qualify for the Fresh Start initiative, which:

Learn more and enroll at: https://studentaid.gov/freshstart

3. Monitor Your Budget and Avoid Predatory Lenders

Post-bankruptcy life during uncertain financial times requires smart planning:

Local Financial Help in Washington, PA:

4. Talk to a Bankruptcy Attorney About Your Rights

While student loans typically aren’t discharged in bankruptcy, there are exceptions—especially under the Brunner Testor hardship-based petitions.

A skilled Washington, PA bankruptcy lawyer can help you:

Conclusion: Don’t Lose Hope—Stay Informed

The pause on the SAVE Plan is frustrating, but it doesn’t mean you’re out of options. If you’re recovering from bankruptcy and overwhelmed by student loan debt, there are still tools and support systems available.

Need help navigating your next steps?
Contact Moody Law Offices to discuss how federal loan changes and inflation may impact your recovery—and how to stay on track.