The U.S. Department of Education announced on Monday that it would resume involuntary collections of defaulted federal student loans on May 5. The announcement means that borrowers who have loans in default could see their tax refunds seized or wages garnished. While many borrowers and advocacy organizations will oppose the move, resuming collections is necessary to incentivize loan repayment. The announcement was never a matter of if, but when.

The current student loan mess

The Department of Education (DoEd) is gearing up to restart involuntary debt collection for its defaulted federal student loan portfolio after pausing collection during the COVID-19 pandemic, the department announced Monday.

President Donald Trump's Department of Education announced Monday that it will soon end the former Biden administration's free ride for student loan borrowers in default.

The ED's Office of Federal Student Aid will restart collections on May 5 for more than five million borrowers who have not made a payment for at least 360 days. Another four million borrowers — not yet considered to be in default — have not paid in 91 to 180 days.

Stock futures fell again on Monday following yet another negative trading week for Wall Street, as investors receive little signs of progress on global trade talks.

Futures tied to the Dow Jones Industrial Average tumbled 347 points, or 0.9%. S&P 500 futures pulled back 1.1%, while Nasdaq-100 futures dropped 1.4%.

Just like a global trade war, the dismissal of the chair of the Federal Reserve by the U.S. President is an event investors know will be unequivocally bad for markets. But it is also a risk that is too far-reaching to properly quantify, meaning the market might be forewarned, but it won't be forearmed.

U.S. President Donald Trump on Thursday escalated his feud with Fed Chair Jerome Powell - who Trump himself nominated in 2017 – writing on social media that "Powell's termination cannot come fast enough" and later telling reporters that the Fed chair is "playing politics".

At a congressional hearing in July 2019, Representative Maxine Waters asked the Federal Reserve chairman, Jerome Powell, what he would do if the president called and said, “I’m firing you, pack up, it’s time to go.” Mr. Powell said diplomatically, “My answer would be ‘no.’” In private, he was more blunt. “I will never, ever, ever leave this job voluntarily until my term ends under any circumstances,” he said. “None whatsoever. You will not see me getting in the lifeboat.”

President Trump’s tariff war isn’t going well, with market ructions and evidence of a slowing economy. So it was probably inevitable that Mr. Trump would demand that the Federal Reserve ride to his rescue by cutting interest rates. The President took to social media Thursday morning to blast Fed Chairman Jerome Powell with his familiar nuance.

President Donald Trump renewed his call for the Federal Reserve to cut interest rates, saying Fed Chair Jerome Powell’s “termination cannot come fast enough.”

In a Truth Social post on April 17, Trump urged the Federal Reserve to emulate the European Central Bank (ECB) and follow through on rate cuts as prices are down and “the USA is getting rich on tariffs.”

President Trump lashed out at Federal Reserve Chair Jerome Powell in a post on social media Thursday that hinted at potentially dismissing the central bank leader, one day after Powell warned that the Fed could face a difficult trade-off as tariffs raise prices and weaken the economy.

“Powell’s termination cannot come fast enough!” the post read. Trump said Powell “is always TOO LATE AND WRONG” and should be cutting interest rates alongside other central banks.

President Donald Trump on Thursday sharply criticized Federal Reserve Chair Jerome Powell, urging the central bank to lower interest rates and saying Powell’s “termination cannot come soon enough.”

It was not clear whether Trump’s comments indicated a desire to remove Powell from his position or an eagerness for the completion of Powell’s term as Fed chair in 2026. The Fed is an independent government agency established by Congress.