Editorial Note: Opinions and thoughts are the author’s own and not those of AFROTECH™.

This week, former wrestling promoter and current Education Secretary Linda McMahon published an Op-Ed in the Wall Street Journal announcing the Trump administration’s plans to begin collecting on defaulted student loans. However, as we’re on the brink of experiencing a recession thanks to President Donald Trump’s trade war, this act runs the risk of contributing to an economic slowdown, according to ABC News.

Beginning on May 5, around 5 million borrowers who have defaulted on their student loans will be sent to collections. When they are sent to collections, the federal government will seize federal tax refunds, even garnish wages and other forms of income to pay off the debt. Many borrowers cannot afford a student loan payment, which is why they defaulted in the first place. Federal loans also have high interest rates, which this current administration has shown no interest in lowering to alleviate the pain for borrowers.

The Economic Impact Of Debt Collections

Going after borrowers won’t jumpstart the economy. Instead, the economy will downturn and add further damage already compounded by tariffs and rising prices. Currently, it’s not necessary, but this administration is focusing on cruelly retaliating against people who felt a bit of relief when former President Joe Biden paused collections in 2020.

Consumer spending makes up around 70% of the American economy. While most borrowers aren’t splurging on random purchases, they’re often going to choose spending money on other things rather than paying off their debt. If they’re sent to collections and their wages are garnished, they won’t have any money to spend in the local economy, and collecting the debt won’t offset the loss.

Debt collection also means that borrowers’ credit scores will be damaged, creating more difficulties for them to take out loans to purchase homes and cars.

But even with all these warnings, there is still so much uncertainty surrounding the economy and how it will affect us. When the tariff pause is lifted, we’ll have a better idea of how the economy will react. Even Wall Street strategists are uncertain about the economy and feel betrayed by the chaos of the Trump administration’s economic policies.

What’s Next For Your Student Loans?

Income-driven repayment plans (IDR) and loan rehabilitation are still options. IDR plans like Saving on a Valuable Education (SAVE) were temporarily removed, but as of March 2025, there is an online application available.

While McMahon did not mention the SAVE program, there is a possibility that House Republicans have plans to kill it as part of their budget bill, according to Axios.

For borrowers who owe a lot of money, this is only one of many financial burdens that the Trump administration has placed on the American people. There should be a plan in place to help those who are struggling with payments, not make their lives worse.