AUSTIN, Texas — A Central Texas attorney is taking legal action against the U.S. Department of Education, claiming a sudden and massive spike in her student loan payments is the direct result of a decision by the Trump administration — one that she says left borrowers blindsided and financially vulnerable.
Ashley Morgan, an Austin-based attorney, filed a lawsuit this week against Education Secretary Linda McMahon and the Department of Education after discovering her monthly student loan payment had increased from $507 to a staggering $2,463 — an increase of over 350%.
“I’m not seeking money, I just want what I was told I would get,” Morgan told CBS Austin.
Morgan alleges the increase came after the Trump administration abruptly paused all income-driven repayment (IDR) plans in February — without notifying borrowers. These plans typically allow student loan payments to be calculated based on a borrower’s income, often making them more affordable.
“I logged into my loan account and saw my payments had more than quadrupled,” she said. “It was shocking — and it’s not affordable.”
Morgan, who began repaying her student loans in 2017, said she had never missed a payment in the past eight years. But when she logged into her account recently, she discovered the IDR plan was no longer available, and her loan payments had jumped overnight. There had been no warning, she claims.
“They’re really hurting people that can’t afford to wait around and figure out what to do with student loans or how to pick up the pieces of the Department of Education,” she said.
Morgan says she reached out to the Department of Education, her loan servicer, and Texas Senators Ted Cruz and John Cornyn — but received no clear answers or help.
“I just realized I wasn’t going to get help and I was going to have to help myself,” she said. “That’s why I filed this lawsuit.”
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Morgan’s lawsuit goes beyond financial hardship. She claims the sudden change has caused “mental and emotional distress” and alleges other borrowers are experiencing similar impacts — including reports of suicidal thoughts due to the financial strain.
“I’m seeing a broad array of reactions from other borrowers,” she said. “It’s clear that people are scared and overwhelmed.”
The lawsuit comes amid sweeping changes at the Department of Education. On Thursday, President Donald Trump signed an executive order to begin dismantling the department, transferring authority to individual states.
“It’s doing us no good,” Trump said. “We want to return our students to the states.”
The executive order instructs Secretary McMahon to begin the process of downsizing the agency. However, fully eliminating the department would require congressional approval.
While some Texas leaders, including Gov. Greg Abbott and Lt. Gov. Dan Patrick, praised the move, others — like U.S. Rep. Lloyd Doggett — warned it could further undermine public education and student protections.
For now, income-driven repayment plans remain paused, and borrowers like Morgan are left in limbo — unsure how to manage loan payments that, for some, now exceed rent or mortgage costs.
“I’m not going to default on my loans just because someone is jacking with a couple forms online,” Morgan said. “But I’m not sure how long I can keep this up without help.”
Morgan is hoping the courts step in before she’s forced to drain her savings to keep up with her new monthly bill. She says she’s not alone — and that her lawsuit is about protecting all borrowers who may face the same fate.
The outcome of this case could set a precedent for how the federal government handles student loan repayment plans — especially as the Department of Education’s future hangs in the balance.
