Morning Business Report: Student-loan borrowers to face forced collections, recession concerns are growing

Starting May 5, student-loan borrowers in default will once again face forced collections.

(LILAMAX)- Starting May 5, student-loan borrowers in default will once again face forced collections, as the U.S. Department of Education resumes garnishing wages, tax refunds, and Social Security checks to repay outstanding loans. The move, which mirrors pre-pandemic collection practices, could affect nearly six million borrowers nationwide.

Meanwhile, recession concerns are growing. An influential investor warned there’s a 90% chance of a recession if current tariffs remain in place. In response, President Donald Trump met with top retail executives—Walmart CEO Doug McMillon, Target CEO Brian Cornell, and Home Depot CEO Ted Decker—to discuss the potential economic impact of tariffs.

On Wall Street, stocks slid again Monday, fueled by President Trump’s ongoing criticism of Federal Reserve Chair Jerome Powell and investor frustration over stalled trade talks. The Nasdaq took the hardest hit percentage-wise.

At the consumer level, signs of economic stress are starting to show. Frozen pizza sales—often viewed as a recession indicator—are on the rise, reminiscent of the 3.1% growth in frozen food sales during the 2009 recession.

Adding to the financial unease, only one in 10 Americans say they feel “very good” about their current financial situation. According to a survey commissioned by Beyond Finance ahead of Financial Practice Week, 84% of respondents say planning for future financial success is more critical than ever in today’s uncertain economy. The survey also highlighted a lack of financial education in respondents’ youth, which may be fueling today’s lack of confidence in money management.