Update: Ashley Morgan sued the U.S. Department of Education and its secretary on March 19 over the removal of income-driven repayment plans for federal student loans. The American Federation of Teachers has filed a similar lawsuit on behalf of its members.
When Ashley Morgan decided to go to law school, it was uncharted territory for her family.
"I'm the first lawyer in my family,” the 35-year-old said. “My parents don't have four-year degrees. Most of the people in my family are ranchers, teachers or some kind of entrepreneur or work for the railroad.”
Even with the help of scholarships, Morgan said, she could not have afforded college or law school without taking out student loans.
“I lived off student loans for eight years while going to school,” she said.
Morgan is now a trial attorney with an office in downtown Austin. But, these days, she's questioning whether the cost of pursuing a law degree was worth it.
Morgan said she took on federal student loans with the understanding that she’d be able to pay them back based on her income – something she’s been doing for the last eight years.
But when it was time for her to recertify her income, she couldn't. The U.S. Department of Education, which President Trump wants to dismantle, had removed the forms for income-driven repayment (IDR) plans just days before her March 1 deadline. Without this option, her monthly payments will skyrocket from $507 to $2,464. The current balance for her federal student loans is just over $255,000.
“When I logged in and I saw that my payments were going to go up in April to over $2,400 a month, my stomach dropped and I just started bawling,” she said. “I didn’t know what I was going to do.”
The discovery filled her with self-doubt.
“Since I found out about this, I second-guessed myself and whether or not a middle-class person even deserves to get to go to law school,” she said. “Because I thought that if you worked hard at your education and put in the time and the effort that it would pay off.”
Student debt relief program blocked
Morgan is one of millions of borrowers facing uncertainty after a federal appeals court upheld a ruling that blocked a Biden-era student loan repayment plan. The Eighth Circuit Court of Appeals sided with seven Republican-led states that challenged the Saving on a Valuable Education (SAVE) Plan.
The Feb. 18 ruling has had a ripple effect on other income-driven repayment plans, said Victoria Jackson, assistant director of higher education policy at EdTrust. The group advocates for policies to remove racial and economic barriers within education.
“As a result of that ruling, the Department of Education unexpectedly and quietly removed the application for income-driven repayment plans and then instructed loan servicers to no longer process or accept applications for at least three months," she said, "which was a major shock to borrowers who had no heads up that this was coming."
Jackson said the Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) plans have also been paused because of the ruling.
"Additionally, it blocks forgiveness after borrowers make 20 or 25 years of repayments for those plans,” she said, referring to programs that wipe out a borrower's remaining balance after a certain period of time. “Only the Income-Based Repayment Plan still has the option for that forgiveness after 20 or 25 years.”
Jackson said the Trump administration has applied the Eighth Circuit’s decision too broadly.
“I would say they went further than the ruling requires," she said, "which is harming borrowers unnecessarily."
Morgan has been repaying her loans through PAYE, which was established in 2012. She said she has tried to get answers about what to do, reaching out regularly to her loan service provider, the Department of Education and her congressional representatives.
“Basically, no one has answers," she said. "It just feels like screaming into the void and like none of them care or are going to do anything to protect the millions of student loan borrowers that are on income-driven repayment."
Persis Yu, deputy executive director and managing counsel for the Student Borrower Protection Center, said borrowers like Morgan aren't alone when it comes to confusion about what’s next. She said the Department of Education has not issued guidance on what borrowers should do.
“The Administration's decision to halt these applications puts borrowers with nearing recertification deadlines, those who need to update their income because they have lost their job, or those who just need to enroll in IDR to avoid default or get credit for public service loan forgiveness in an impossible spot,” she said in an email.
KUT reached out to the Department of Education for information on when IDR forms may be available again, but did not hear back.
Options for student loan borrowers
Jackson said anyone enrolled in an IDR plan should reach out to their loan servicer to see what their options are, including going into forbearance, which temporarily postpones payments, if needed. She said borrowers should also save their student loan records, especially with the future of the Department of Education unclear. The Trump administration fired more than 1,000 of the agency’s employees just this week.
"I think what the Department of Education and the Trump administration don't understand is that middle-class people don't have the ability to mess around for three months and try to figure out what to do. We just don’t have room in our budgets to do this."Ashley Morgan, student loan borrower
“They should be downloading their data file, getting their master promissory note, which could also be with their loan servicer,” she said. “If you are in [Public Service Loan Forgiveness] take screenshots of your payment counter.”
Morgan's student loan servicer has allowed her to put off payments for the next three months.
“The hard thing and frustrating thing to me about using my forbearance months is that you only get so many [forbearance] months over the life of your loan,” she said. “I anticipate that I will be repaying my loan for at least the next 25 years, if not longer.”
Although Morgan's payments will be paused, interest will continue to accrue. And, if nothing changes, her monthly payment will increase nearly five-fold on June 1.
“I think what the Department of Education and the Trump administration don’t understand is that middle-class people don’t have the ability to mess around for three months and try to figure out what to do,” she said. “We just don’t have room in our budgets to do this.”
Morgan said having a nearly $2,500 monthly student loan payment would completely upend all her financial planning. She wonders whether she'll need to sell her house or her car or liquidate her retirement.
“I just feel crushed by my student loans right now,” she said.
