Student Loan Payments Are Spiking. Here’s What Borrowers Can Do

Student loan borrowers are facing an unprecedented spike in monthly payments as the Education Department rushes to implement sweeping changes to repayment plans. The reforms stem from a combination of Trump administration policy changes, regulatory updates, court settlements and statutory changes under the One Big Beautiful Bill Act (OBBBA) that Republican lawmakers and President Trump enacted in 2025.

Millions of Americans are impacted by the changes. Borrowers in the Saving on a Valuable Education (SAVE) plan are receiving notices warning them to switch to a different income-driven repayment (IDR) plan, or they could be forced into an unaffordable Standard Repayment Plan. Meanwhile, the OBBBA will result in the Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) plans getting phased out in 2028. And Parent PLUS Loan borrowers who didn’t take steps to consolidate their loans before July 1, 2025, now find themselves cut off from IDR plan options, while those who did consolidate by the deadline must enroll in an IDR plan by 2028 to be effectively “grandfathered in.”

As a result of the sweeping reforms to federal student loan repayment plans, many borrowers are reporting big jumps in their monthly payments. According to a survey by the Student Debt Crisis Center in summer 2026, more than half of borrowers leaving the SAVE Plan are seeing their monthly payments increase by $500 or more.

“This is a huge wake up call and a desperately needed reality check for lawmakers. Student loan payments are increasing, and with 1 in 5 borrowers in default, those numbers will only continue to rise,” said Natalia Abrams, president of the Student Debt Crisis Center, in a statement following the survey’s publication in July 2026. “Immediate action must be taken by the White House, Department of Education, and Congress to ensure these 7 million borrowers are not left behind due to a failing system they did not create.”

While it would take an act of Congress to change federal student loan repayment plans again, there are some things that borrowers can do in certain cases to try to lower or even pause their monthly payments. Here’s a breakdown.

Tweak AGI to lower student loan payments under IDR plans

In most cases, a borrower’s monthly student loan payment under all IDR plans is typically based on their adjusted gross income (AGI), a figure from their federal tax return. That is usually the standard and best way to calculate a monthly IDR payment. 

There are some perfectly legal strategies borrowers can employ to try to lower their AGI. Any reduction in the AGI could result in a lower student loan payment under IDR plans. Such strategies can include:

• Contributing more to tax-deferred retirement accounts, such as a 401(k) or 403(b).
• Contributing to a health savings account (HSA) or similar account, if offered by your employer, particularly if you have regular or ongoing health care expenses.
• Filing taxes as married filing separately for borrowers who are married; doing so can allow borrowers to exclude their spouse’s income from being factored into their IDR payment calculation.

Borrowers should consult with a qualified tax adviser for guidance on these and other strategies to lower their AGI, as some may have tax consequences to consider. For example, filing taxes as married filing separately can cause some households to pay more in taxes; the question would then become whether the additional tax liability is high enough to offset the savings of lower student loan payments under an IDR plan.

Use alternative documentation of income to payments for IDR Plans

While the AGI figure from a borrower’s federal tax return is typically the best way to calculate an IDR payment for federal student loans, that’s not always true. If your financial circumstances have changed or your income has decreased since your last tax filing (for example, if you recently got separated or divorced, or you lost your job or have gone down to part-time work), then your tax return does not have to be the basis of your IDR payment.

Instead, borrowers can use “alternative documentation of income,” something other than a tax return, to calculate their monthly IDR payment. Such documentation can be a pay stub, a letter from an employer or even a self-certified statement, provided the documentation is clear and is dated within 90 days of the borrower’s signature on the IDR application.

Borrowers also don’t have to wait for their annual IDR recertification deadline (which is typically every 12 months) to update their IDR payment. Federal law allows borrowers to request a recalculation of their IDR payments at any time if their financial circumstances have changed for the worse. So don’t hesitate to exercise that right if your income has dropped and your current IDR payment is based on outdated income information.

Stopping payments on student loans can have serious downsides

For some borrowers, no amount of strategic planning can make their student loan payments affordable right now, even under IDR plans. Between soaring prices and a national cost-of-living crisis, many Americans are struggling just to pay their regular bills.

Borrowers should know that missing payments on federal student loans can have serious consequences. After 270 days of delinquency, a federal student loan can go into default status. Not only can default wreck a borrower’s credit, but it can also have extreme financial repercussions, as the government has powerful tools to force borrowers in default to make payments. Recent reporting suggests that the Trump administration is preparing to resume administrative wage garnishment and federal benefits offsets against defaulted federal student loan borrowers in the coming months; these programs allow the government to seize a portion of a defaulted borrower’s wages and/or benefits without a court order. 

Use forbearance to postpone student loan payments if needed

Borrowers who can’t afford their student loan payments under any repayment plan, including IDR plans, may want to instead look into a deferment or forbearance. These are federal programs that allow borrowers to temporarily postpone payments on their student loans, while keeping the loans in good standing and avoiding default.

“Unfortunately, there may be times when you can’t afford to make payments on your student loans. You may be temporarily unemployed or unable to deal with your student loan payments for other reasons,” says the National Consumer Law Center (NCLC) on its website. “The good news is that in some cases you can suspend your payments, at least for a while.”

Borrowers have up to 36 months of general or “discretionary” forbearance available over the course of a federal student loan’s repayment period. Student loan servicers have discretion over whether to approve the forbearance. Borrowers also have an additional 36 months of “mandatory” or “student loan debt burden” forbearance, which is available in 12-month increments. This type of forbearance is available if the total amount you owe each month on all of your federal student loans is 20% or more of your total monthly gross income. But forbearance of all kinds can have some drawbacks. 

“In many cases, your interest will continue to accrue on your loans even while your payments are paused and will be added to your principal when you resume repayment,” said NCLC. “Interest adds up quickly and is often why loan balances grow so high and become unaffordable. You should consider all of the potential consequences before you ask for a deferment or forbearance.”

In addition, periods of forbearance generally won’t count toward student loan forgiveness in most cases, putting eventual debt relief even further out of reach for borrowers. But if the alternative is defaulting on your student loans, going into a forbearance for the time being may be a prudent move, at least for the moment. Borrowers should try to return to regular repayment as soon as they can, however.