SOME Americans are deciding to to put off paying their student loan debt despite racking up the outstanding total.
The move comes as many consumers nationwide struggle to make ends meet and continue find themselves in a financial hole.
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“I just don’t even care, it’s so far down on the radar,” 32-year-old Stephen Jakubowski, who is still on the search for another job, confessed to Bloomberg recently.
“It’s never been a huge priority.”
Jakubowski told the publication that not only is he barely affording rent and groceries, but credit card debt and personal loan payments take up the rest of his limited disposable income.
The $10,000 in federal student loans he owes back after spending two years at San Diego Christian College over 10 years ago has been forced to take a backseat, and he isn’t alone.
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Millions of other ex-students are skipping out on the debt, which has hit a collective total in the United States of over $1.814 trillion, according to the Education Data Initiative.
The average federal student loan balance per person is $39,075.
At least 42.5 million borrowers have federal loan debt, and it represents 91.6% of all student loan debt.
After five years of pauses and leniency for some to pay back the funds from the federal government, repayment is in full swing again.
REPAYMENT REFUSAL
Except, data from the Department of Education showed in April that only about a third of former students getting bills are paying up.
The remaining two-thirds either can’t afford to or are unwilling.
Those in a similar situation to Jakubowski have to consider priorities as he does, first putting money towards a roof over their head and maybe a vehicle loan before student loans.
Both categories affect them on a day-to-day basis as opposed to student loans, as their time in college is over.
Except, that isn’t always the case.
Some are not paying in protest to new Republican policies, as they favored the forgiveness from former President Joe Biden’s administration.
New legislation’s impact on student loans
In addition to reducing the types of repayment plans, Trump’s One Big Beautiful Bill will impact the amount of money that students can borrow from the federal government.
It will get rid of the Graduate PLUS Program, a repayment option that allows graduate or professional students to borrow up to the full cost of attendance.
Under the new legislation, graduate students will face a cutoff of $100,000 for lifetime loans, while medical and law students will be capped at $200,000.
The cap for Parent PLUS loans will also be set at a $65,000 per dependent student and will not be eligible for repayment programs.
The new legislation will also affect how student loan deferment works, eliminating deferment options for those struggling due to unemployment or economic hardship.
Borrowers will, however, be permitted to rehabilitate defaulted loans twice instead of just once.
Other changes under the bill include Pell Grant eligibility, including the establishment of Workforce Pell Grants for individuals in career or technical-based education programs.
CONSEQUENCES LIMITED?
The consequences of not paying the student loans aren’t extremely penalizing for some Americans, either.
A dip in credit score would be the biggest, followed by possible wage garnishment, meaning a portion of checks from employers would be taken out to pay the student loans, and default.
Sarah Newcomb, senior behavioral scientist at Edward Jones, suggested that these repercussions don’t motivate former students enough, considering their circumstances.
“It’s possible that the consequences feel too abstract to feel motivational for people,” Newcomb told Bloomberg.
“There may be people who feel the system is unjust.”
“But, those emotions can lead to financial self-sabotage,” she warned.
CHANGES MADE
The Trump administration is cracking down on the refusal to pay, however, implementing new approaches.
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” Department of Education Secretary Linda McMahon said in a statement this spring.
As part of provisions in the One Big Beautiful signed into law by President Donald Trump on July 4 of this year, new student borrowers can only choose a standard repayment plan for federal loans or the Repayment Assistance Plan as of July 1, 2026.
The standard plan has term lengths ranging from 10 to 25 years, depending on the size of the loan, and the Repayment Assistance Plan allows for 30 years of payments before loan forgiveness.
Current borrowers who still owe money by July 1, 2028, will have to switch to an Income-Based Repayment Plan, the Repayment Assistance Plan, or the standard plan.
Millions of Americans are also now scrambling to keep up as interest has resumed, hiking monthly payments by as much as $300.
Some also have until September 15 to get $5,000 in debt relief from a $9 million pot.
