Yellen skeptical of Biden’s student loan relief, Harris pushed for plan: NYT

• Yellen was a skeptic of the student-loan forgiveness plan when Biden made the announcement in the NYT.
• Jill Biden, a teacher who pushed for tuition-free community college, was also discouraged.
• Meanwhile, Kamala Harris was one of the administration’s most aggressive advocates for debt relief.

Treasury Secretary Janet Yellen was skeptical of a large-scale student loan forgiveness plan when President Joe Biden was considering special conditions to solve student debt. The administration’s staunch supporters of debt cancellation, The New York Times reported.

The longtime economist — who served as chairman of the Federal Reserve Board from 2014 to 2018 — said in May that broad student loan relief “could be good for the economy.” In the year At a time of high inflation not seen since the early 1980s, she felt that a major debt write-off would have a major impact on the economy.

Shortly after taking office last year, Biden began hearing from economists who were concerned about the report’s massive amnesty program. More than a year later, the president announced that his administration was studying the issue, and in one of his first actions in office, the Trump administration extended student loan repayment waivers for most federal student loan borrowers during the coronavirus pandemic.

Meanwhile, according to the report, Biden was unsure what decision to make as he tried to get input from individuals who expressed hesitation about the student-loan forgiveness plan. At a town hall in February of last year, for example, he questioned his authority to write off up to $50,000 in student debt — an amount that many Democratic lawmakers are pushing for.

First Lady Jill Biden was also skeptical of such a plan, according to people close to the longtime teacher who spoke to The Times.

Jill Biden — a community college professor who continues to teach while living in the White House — has for years championed tuition-free community college, which is set to be included in the bill formerly known as the Build Back Better Act. (The education plan was intended as a way to reduce the cost of the bill, but it still fell through after party infighting.)

While several top Democrats tried to push Biden on the issue, several House Democrats sought to convince Jill Biden that the student-loan cancellation plan would not reduce the president’s support for tuition-free community colleges, The Washington Post reported.

And Vice President Kamala Harris — who pledged to be a full administration partner during the 2020 presidential campaign — has been at the forefront of the Democratic push to cancel student loan debt. In February, Harris directed her staff to write additional memos to address the president’s points regarding Biden’s loan cancellation.

Biden had some skepticism that the plan appeared to benefit “private elite schools,” and Harris’ team tried to counter his hesitation by saying in a report that “only 0.3 percent of federal loan borrowers attended.”

To counter criticism that student loan debt needs to be fixed by Congress — a point raised by other Democratic lawmakers — Harris’ memo said he was working on an executive order that halted most federal student loan payments.

Biden announced that he would forgive $10,000 in federal student loan debt for borrowers earning less than $125,000 a year, and up to $20,000 in relief for those who received Pell aid and fall within the same income threshold. Also central to the plan is Biden extending the monthly payment on federal student loans at 5% of individual income with a new income-based repayment plan from the fifth and final student-loan payment until Dec. 31.