STUDENT loan borrower Stephen Jakubowski, a 32-year-old from California, has been choosing to ignore his $10,000 federal debts for years.
He is not alone, however, as millions of Americans are putting their student loans on the back burner as a form of protest or simply because other financial responsibilities, like food and housing, are more pressing.
Millions of Americans are choosing to neglect their student loan bills in protest or because other financial obligations are more pressing[/caption]
Borrower Stephen Jakubowski shared why he has opted to ignore his $10,000 federal debts for years[/caption]
The U.S. Sun spoke with two student loan experts on why borrowers are not paying their debts and the potential consequences[/caption]
Americans have racked up approximately $1.6 trillion in student loan debt, with students once again forced to make payments after five years of leniency efforts from the federal government that started during the pandemic.
Despite the policy change, many Americans are choosing not to pay.
Jakubowski, for example, is ignoring his federal student loans as he struggles to afford rent and groceries, as well as his credit card debt and personal loans.
He racked up $10,000 in debt from his time at San Diego Christian College over 10 years ago, dropping out after roughly two years to work as a firefighter.
The former student was making payments toward his loans monthly until Covid deferment, when payments on eligible federal student loans were automatically paused.
He explained that repayments began roughly 180 days ago, around the same time that he lost his construction job which he calls a “major life setback.”
“I would make some payments but I lost my job in 2024 and it has been challenging to find equal paying work since then,” Jakubowski told The U.S. Sun.
“I live in California which has the highest living expenses right now.
“I haven’t made any significant payments towards the debt in years.”
Only 38% of students are actually paying back their debts, with the rest either unable or unwilling to cough up the cash, per April data from the Education Department.
Experts say many former students are unable to pay their debts due to high cost of living pressures.
“Everything is more expensive right now, so a lot of people are making tough decisions about what bills to pay and which to delay,” student loan counselor and personal finance writer Kat Tretina told The U.S. Sun.
Others are choosing to neglect their student loans as a form of protest after former President Joe Biden’s forgiveness plan – which would have wiped out billions in student debt – was crushed by Republican votes, legal challenges, and continued criticism.
Several have expressed their frustrations on social media, including Facebook user Jessica Melody.
“For the 42.7 million Americans who have federal student loans… STOP PAYING THEM,” she cried. “Let’s take a break and starve this administration of $21.3 BILLION PER MONTH!
Student Loan Statistics
- Student loan debt in the US is over $1.777 trillion
- Federal student loan debt accounts for 92.2%
- Average federal student loan debt amount per person is $38,375
- Students at a public university borrow $31,960 on average to attain a bachelor’s degree
Credit: Education Data Initiative
“After sixteen years of faithful payments, I stopped my auto pay TODAY. Instead of my money going to Edfinancial, I’ll keep my money in my pocket during these very uncertain times.”
FAR-OFF CONSEQUENCES
For borrowers who choose to refrain from making payments on their federal student loans, like Melody and Jakubowski, the repercussions are minimal.
“People often pause student loan payments because the consequences are less tangible since student loans are unsecured,” explained Tretina.
“If you have a car loan, for example, and fall behind, the lender can repossess your vehicle, but that’s not the case with student loans.”
The most immediate impact is a reduction in credit score, which can negatively affect one’s ability to receive other loans, apply for a credit card, or even rent an apartment.
Approximately 2.2 million borrowers had their credit scores drop by 100 points or more in the first quarter of 2025, per the New York Federal Reserve.
However, many Americans argue that it doesn’t matter, especially if they do not intend to apply for a mortgage or car loan.
After a borrower’s credit rating takes a hit, potential wage garnishment follows, during which up to 15% of a worker’s disposable income can be withheld from their paycheck without a court order.
While wage garnishment can take months to occur once a borrower is late on a payment, those who defaulted on their loans prior to the pandemic collection pause will likely be affected first.
For Americans who are just now entering default status – after 270 days of non-payment – their pay may not be withheld until months into 2026.
Additionally, freelancers and gig workers may not be impacted by wage garnishment at all.
New legislation’s impact on student loans
When Donald Trump signed the One Big Beautiful Bill Act into law on July 4, one of the key provisions was that Americans with outstanding federal student loans now have just two repayment options.
Popular income-driven repayment plans like the SAVE plan established under the Biden administration, Pay As You Earn, and Income-Contingent Repayment are being axed.
New student borrowers are being forced to choose between the new standard repayment plan or Repayment Assistance Plan by July 1, 2026.
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 $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.
A WORD OF CAUTION
Many borrowers feel distanced from the repercussions of not paying their student loans, instead opting to wait and see what happens.
Experts, however, are encouraging Americans to stay on top of their student loan debt.
“It’s not wise to pause student loan payments. While it can be tempting to stop making your payments to free up cash for rent or utilities, it can have severe consequences,” cautioned Tretina, alluding to the potential of wage and tax refund withholding as well as a drop in credit score.
The Trump administration is planning to take all necessary steps to collect on the significant debts that students owe, Jay Zigmont, certified financial planner and founder of Childfree Trust, told The U.S. Sun.
“You are better off getting on an income-driven repayment plan and managing the payments than having a forced garnishment,” he said.
The president has taken a more stringent approach to student loans than previous administrations, even introducing a new repayment plan with stricter terms and narrowing eligibility for public service loan forgiveness.
Regardless of the federal government’s threats against borrowers, the remote possibility of wage garnishment and other consequences has left many casting their student loan debt to the back burner.
“It’s possible the consequences feel too abstract to feel motivational for people,” Sarah Newcomb, senior behavioral scientist at Edward Jones, told Bloomberg.
“There may be people who feel the system is unjust. But those emotions can lead to financial self-sabotage.”
Jakubowski, in spite of feeling distanced from his debt, plans to eventually resume payments on his student loans to avoid the financial repercussions.
“To the people who argue I have a responsibility to pay my loans, I partially agree – but everyone’s situation is different,” he said. “I am planning to continue paying them off along with other personal debt when my income is back on track.”
PLAN AHEAD
The far-off consequences of non-payment, a series of unsuccessful attempts at loan forgiveness, and persistent legal challenges to repayment plans have all left student loan borrowers feeling confused and frustrated over their debt obligations.
It’s not wise to pause student loan payments. While it can be tempting to stop making your payments to free up cash for rent or utilities, it can have severe consequences.”
Kat Tretina
While millions are ignoring their debts to the federal government, experts suggest taking a more fiscally responsible approach to student loans.
“As soon as you realize money is tight, contact your loan servicer,” advised Tretina. “The sooner you reach out – ideally, before you miss a payment – the more options you’ll have.”
Zigmont agreed that the first step in eliminating your student loan debt is to have a plan, as student loan forgiveness is “off the table for now.”
The expert pointed towards Student Loan Planner as a great resource, noting that the site has experts who can walk you through your options and the changing landscape of student loans.
Both financial experts suggested looking into different repayment plans, finding which works best for your situation, and budgeting effectively to pay off your loans as efficiently as possible.
Tretina also said that some borrowers may qualify for short-term payment deferments or forbearance.
Millions of Americans with student loans are also now scrambling to keep up as interest has resumed, hiking monthly payments by as much as $300.
Meanwhile, some borrowers have until September 15 to get $5,000 in debt relief from a $9 million pot.
