Austin attorney sues over drastic student loan payment increase

An attorney from Austin is suing the federal government after a sudden change in student loan rules drastically increased her payments. Ashley Morgan, 35, had her monthly bill rise by almost 400 percent due to the removal of important forms needed to update her income. She filed a lawsuit against the U.S. Department of Education and its Secretary, Linda McMahon. Morgan has been on an income-driven repayment plan for eight years. The issue arose when the forms she needed to recertify her income were taken off the Department of Education's website just before her deadline. With no updated information, her loan servicer recalculated her payments. This caused her monthly bill to jump from $507 to $2,464 starting in April. Though she received a temporary three-month break from payments, interest is still accruing. Morgan fears her full payment will be due in June, and she states it has caused her significant stress. This lawsuit is one of the first to challenge the department’s decisions after a court ruling blocked a new repayment plan from the Biden administration. Morgan is among the 43 million Americans with federal student loans, and she expressed frustration over the lack of support and answers from the Department of Education. Adding to the uncertainty, President Trump recently signed an executive order aimed at possibly shutting down the Education Department. This order does not immediately affect the agency, but critics warn it could lead to disruptions in services that manage student loans, financial aid, and civil rights enforcement in schools. Morgan's situation highlights the challenges faced by many borrowers. With a student loan balance over $255,000, she emphasized that middle-class individuals cannot easily manage sudden financial changes. She stated, "We just don't have room in our budgets to do this."