Most struggling student-loan borrowers do not need bankruptcy first — they need to be screened against the federal administrative routes the U.S. Department of Education already offers (studentaid.gov). The menu: PSLF (120 qualifying payments + qualifying public-service employer), TPD discharge (total and permanent disability), IDR forgiveness, Borrower Defense (school fraud), and closed-school discharge. In 2026 several routes are unsettled: the SAVE plan ended by court order on March 10, 2026, and a revised PSLF rule plus the new Repayment Assistance Plan (RAP) and Tiered Standard plan are scheduled to take effect July 1, 2026 (ed.gov). When none of these administrative routes fit — for example, defaulted private loans or federal loans with no forgiveness path left — discharge through a Chapter 7 bankruptcy adversary proceeding under 11 U.S.C. §523(a)(8) becomes the remaining option.
Litigation Timeline
Revised PSLF Rule and New Repayment Plans Take Effect
The Department of Education's revised PSLF rule takes effect, counting only conduct on or after this date when excluding "substantial illegal purpose" employers. New Repayment Assistance Plan (RAP) and Tiered Standard repayment plans also launch (ed.gov).
Sweet v. Cardona Adjudication Deadline
The Ninth Circuit's extended deadline for post-class Borrower Defense adjudication under the Sweet v. Cardona settlement (cdn.ca9.uscourts.gov; studentaid.gov).
SAVE Plan Ends by Court Order
The SAVE income-driven repayment plan ends by federal court order. Borrowers transition to remaining plans — IBR, PAYE, and ICR — which are restricted going forward (studentaid.gov, idr-court-actions).
SAVE Plan Litigation Settlement
A settlement is reached in the litigation over the SAVE income-driven repayment plan, setting the stage for the plan's wind-down (studentaid.gov, idr-court-actions).
FTC Obtains $743,230 in Restitution from Debt-Relief Scam
The Federal Trade Commission obtains $743,230 in consumer restitution in a student-loan debt-relief enforcement action, part of a 2025–26 crackdown that permanently banned multiple operators from the industry (ftc.gov).
Collections on Defaulted Federal Loans Resume
The Department of Education resumes collections on defaulted federal student loans, including the Treasury Offset Program and wage garnishment (ed.gov).
Executive Order 14235 Directs PSLF Rulemaking
Executive Order 14235 directs the Department of Education to revise Public Service Loan Forgiveness, leading to a rule that excludes employers engaged in a "substantial illegal purpose" (ed.gov).
Eighth Circuit Enjoins the SAVE Plan
The U.S. Court of Appeals for the Eighth Circuit issues an injunction against the SAVE income-driven repayment plan, halting its implementation (studentaid.gov, idr-court-actions).
Federal Student Loan Interest Resumes
Interest begins accruing again on federal student loans after the pandemic-era pause, and the return to repayment begins (ed.gov).
DOJ and Education Department Issue Bankruptcy Discharge Guidance
The U.S. Department of Justice and the Department of Education release joint guidance and an attestation form that streamline how federal student loans are evaluated for discharge in bankruptcy under the undue-hardship standard. The guidance is non-binding and does not bind courts (justice.gov).
Sweet v. Cardona Settlement Approved
A federal court approves the Sweet v. Cardona settlement, providing Borrower Defense relief to defrauded student borrowers. Post-class members may seek adjudication of their claims (studentaid.gov).
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