At 51 years old, David Chatman finds himself confronting one of the most difficult financial decisions of his life: filing for bankruptcy. The catalyst for this drastic step lies in a sudden and dramatic increase in his monthly student-loan payments—from an already manageable $86 to a staggering $689—a change prompted by President Donald Trump’s decision to terminate the income-driven repayment plan on which Chatman had relied for stability. This plan, known as the SAVE (Saving on a Valuable Education) program, was a hallmark initiative introduced under former President Joe Biden’s administration, designed to offer struggling borrowers reduced monthly costs and a quicker trajectory toward full loan forgiveness. However, in early December, the Trump administration proposed a legal settlement that would permanently dismantle the program, subjecting millions to uncertainty and potential financial hardship.
For Chatman, this development arrived as a breaking point. He told Business Insider that he has always managed his credit and loan obligations with diligence, emphasizing that he has never missed a payment in his life—whether on credit cards or student loans. Yet now, as he calculates his new obligations, he says that continuing along the same financial path has become unfeasible, if not impossible. In his own words, seeking bankruptcy protection feels like “the lesser of all the evils,” a pragmatic yet emotionally painful decision made in the face of insurmountable pressure.
The SAVE plan’s future has hovered in ambiguity for well over a year. The uncertainty began when a coalition of Republican-led states initiated a lawsuit seeking to block the plan’s continued implementation. As a result, more than seven million borrowers enrolled under SAVE were placed into forbearance during the summer of 2024, suspending active payments but leaving their long-term status unresolved. By August, the Department of Education, operating under Trump, resumed the accrual of interest on SAVE accounts, signaling a policy reversal that left many borrowers fearing mounting balances. Should the courts approve the proposed settlement, borrowers will be required to transition into alternative repayment plans within a limited timeframe—plans that are almost certain to come with significantly higher monthly payments.
In defense of the policy shift, Nicholas Kent, the undersecretary of education, issued a statement asserting the administration’s rationale: those who borrow money have an obligation to repay it. Kent argued that American taxpayers should no longer be compelled to underwrite what he termed unlawful and fiscally irresponsible student-loan programs. According to him, the end of SAVE restores a measure of fairness and accountability to the federal loan system.
Chatman, however, perceives the matter very differently. Having faithfully made payments since earning his bachelor’s degree in microbiology from Oregon State University in 2015, he feels betrayed by a system that once promised repayment options tailored to his modest income. Upon graduating with approximately $63,000 in student debt, he envisioned gradually paying it off while earning an hourly wage at a local car dealership. Without the SAVE plan to cushion the payments, that vision has unraveled, leaving bankruptcy as his only viable avenue to find fiscal relief and begin anew.
“When I saw the statement showing how high my next payment would be, I just stared at it,” he said. “It was completely beyond my reach. There was simply no way.” His quiet disbelief captures the anxiety shared by millions of borrowers across the country who are now bracing for similar consequences.
Meanwhile, Business Insider has called for readers to share their personal experiences in navigating student debt—whether they involve success stories, ongoing hardship, or unique paths through the labyrinth of repayment programs—inviting borrowers like Chatman to contribute to the ongoing national conversation.
Chatman’s story is not an isolated case. Brenda McCoy, a 60-year-old social worker, finds herself confronting the same grim financial reality. After returning to school mid-career to complete a master’s degree in social work in 2018, she amassed approximately $55,000 in federal student loans. Prior to the pandemic, McCoy dutifully made her monthly payments, but during the forbearance period, her financial footing shifted. Once the SAVE plan became available, she enrolled and saw her monthly payments drop to about $480—a sum she could manage comfortably. Yet with SAVE’s elimination, she anticipates her payments may exceed $1,000 per month, a figure that would destabilize her budget. “I’m preparing myself for an astronomical bill,” she said. “I’ve always prided myself on being self-sufficient and financially responsible, but the payments still need to be within the bounds of what I can realistically afford.”
The Department of Education has encouraged SAVE participants to transition to an Income-Based Repayment (IBR) plan, an existing program that adjusts monthly payments according to each borrower’s income and offers forgiveness after twenty to twenty-five years of consistent repayment, depending on when the loans were disbursed.
Officials are currently overhauling the IBR guidelines to reflect new legislative changes implemented through Trump’s recent spending bill, which eliminates the previous requirement that borrowers demonstrate a ‘partial financial hardship’ to qualify. This adjustment expands eligibility—allowing even higher-income borrowers to participate—though the final modifications are not expected to be completed until December.
In addition, the Department is planning the rollout of an entirely new Repayment Assistance Plan in July 2026. Under this forthcoming program, borrowers’ monthly obligations would fall between one and ten percent of their discretionary income, with any remaining balance forgiven after thirty years. Although it offers some level of flexibility, experts note that this new structure remains far less generous than the SAVE plan and will likely result in higher monthly payments for most borrowers.
According to Abby Shafroth, the managing director of advocacy at the National Consumer Law Center, the SAVE program represented a meaningful advancement in helping low- and middle-income borrowers achieve manageable repayment schedules and progress toward long-term loan elimination. With the plan’s demise amid what she calls “a national affordability crisis,” she warns that countless Americans now face an opaque and uncertain path forward.
If the court ultimately endorses the Department’s proposed settlement, servicers will contact current SAVE borrowers with updated instructions about available repayment options and transition timelines.
Among those waiting anxiously for clarity is Jennifer Oakes, 41, who has already felt the financial squeeze from persistently rising costs of essentials such as groceries, housing, and car payments. Under the SAVE plan, she qualified for a $0 monthly payment due to her income and family situation—a vital reprieve that allowed her household to stay afloat. Now, as that lifeline disappears, she expresses deep concern about the future. “I feel a constant sense of anxiety and fear,” Oakes said. “Not long ago, I genuinely believed the government’s goal was to protect people like us—to make sure borrowers wouldn’t be left stranded. Lately, that confidence has been replaced with the opposite feeling entirely.”
Her apprehension echoes a growing sentiment: that the rollback of affordable repayment programs leaves many Americans facing a stark and unpredictable financial landscape, forced to reconcile the cost of higher education with the daunting realities of everyday survival.
Sourse: https://www.businessinsider.com/save-plan-blocked-student-loan-borrowers-brace-higher-monthly-payments-2025-12
