Kamala Harris, Schumer and Warren Pushed Biden to Cancel Student Debt, Economists Advised Against

The president rushed to announce the move a little over two months before the midterms, in which Democrats are expected to lose Congress seats. The POTUS failed to reveal any data on how much the policy might cost.

A group of Democratic Congressmen and women alongside Vice President Kamala Harris spent months convincing US President Joe Biden that he should cancel billions of dollars in student loan debt, the New York Times reported citing anonymous sources.

The NYT report also claimed that Biden’s wife and his economic advisers all expressed significant reservations about the plan.

According to the newspaper, Biden reportedly considered a number of concerns regarding plans to write-off student loan debt. The two biggest sticking points were the fairness of the move towards those who had paid their debt in full, and fear the write-off would mostly benefit "rich white students", the newspaper alleged.

These concerns were reportedly no secret, with Biden regularly discussing the possibility of the debt write-off, which he promised to voters as he strived to outplay both his Democratic opponents and potential Republican candidate Donald Trump. As part of this debate, the move’s proponents, namely Vice President Kamala Harris, gathered data and arguments to make their point and sway the president into writing off more than $10,000 per student, sources claimed.

In this context, Harris reportedly told the president that "only 0.3% of federal loan borrowers attended Ivy League schools". The newspaper's sources name the VP as the "most persistent promoter" of the debt cancellation, but she was not alone.

Democratic Congressmen and women Chuck Schumer, Elizabeth Warren and Raphael Warnock, as well as White House Chief of Staff Ron Klain, all reportedly worked for month trying to convince the POTUS. Klain reportedly insisted that the move would galvanize young voters in November. Likewise, Schumer and Warrant reportedly bent the president's ear during joint flights on Air Force One, feeding him human stories about lives undermined by debt and assurances that the majority of people who would be eligible for the write-off are "poor people and people of color", sources claimed.

White House Economists Opposed Write Off

The proponents of the debt forgiveness intensified their efforts in May 2022 and active deliberations took place throughout summer, according to the newspaper. But, they had their opponents as well.

First Lady Jill Biden was reportedly not a fan of the policy in the way progressive democrats proposed, sources allegedly close to her claimed. She instead favored the establishment of the free community colleges.

The economic bloc of the White House was similarly not happy about the initiative, considering the fact that it and the Federal Reserve are currently struggling to contain historically high inflation in the country, the newspaper sources said.

Treasury Secretary Janet L. Yellen was one of the highest sitting skeptics of the initiative among Biden's inner circle, the media outlet alleged. She was reportedly concerned with the potential economic aftermath of writing-off an indefinitely high amount of debt, potentially enabling people to spend more and drive inflation higher. According to the New York Times, several top Democratic economists echoed this sentiment.

Lastly, not everyone at the White House was sure that the announcement would necessarily help the party in the elections. One of POTUS' political advisers, Mike Donilon, reportedly warned that public opinion on the move was split. He noted that debt write-off might alienate the elder population who saved money for education for themselves or their children and could see the move as unfair, the newspaper said.

Not Well Thought Out Plan

The timing for the announcement of the $10,000 to $20,000 student loan write-off for those making less than $125,000 a year came suspiciously close to the midterms, where Democrats fear they may lose many positions in Congress amid the administration's numerous shortcomings. The details, or rather lack thereof, only adds to these suspicions.

After the proponents of the debt write-off convinced Biden that he should move forth with the plan, the POTUS apparently decided not to waste any time announcing it, despite not handling any serious calculations regarding how much the plan would cost the country and how it may be paid for.

White House spokeswoman Karine Jean-Pierre mentioned that a "portion" of the plan might cost as much as $24 billion, but the final number would be determined by the number of applicants for debt forgiveness.

At the same time, the Department of Education had no time to think through an approximate scheme of how the write-off would happen. As such, loan servicing companies and the department itself were left clueless when thousands of youngsters started to call, the New York Times' sources said.

The lack of calculations of the costs and potential negative effect on the economy, which formally entered recession with two consecutive quarters of declining GDP this year, contributed to angering Republicans and some moderate Democrats. They branded the policy reckless and dangerous for the country's recovery from the current economic challenges.