Joe Biden was reportedly advised not to waiver student loan debts by Treasury Secretary, Janet Yellen and his own wife Jill, but was pushed into going ahead with the controversial decision by Vice President, Kamala Harris.
On Wednesday, the president announced he would cancel $10,000 of student loan debts for those who earn $125,000 or less.
Yellen allegedly warned Biden that the legislation could encourage more consumer spending which would push inflation levels even higher.
First Lady, Jill Biden was also vocally against the scheme. She works part-time as a college lecturer and has campaigned for free community college but was against the debt cancellation idea.
But it appears Biden was intimidated by pushy Harris enough to ignore their advice and go ahead with the bill which polls suggest has split public opinion.
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While it’s a popular move with some young voters, many conservatives have argued that Biden is punishing those who chose not to or couldn’t go to college or university.
The cost of the scheme will also be huge. The Wharton School of Business estimates it costing the taxpayer around $1 trillion and its research suggests that 70 percent of those benefiting from the loan relief will be in the top 60 percent income bracket.
There is also concern that private and elite schools would benefit from the handout.
Harris has been a vocal advocate for the legislation and her pressure on Biden to go ahead with the scheme probably forced his hand despite the reservations of others in his own party.
As early as 2019, Harris Tweeted:
“Yesterday I announced that, as president, I’ll establish a student loan debt forgiveness program for Pell Grant recipients who start a business that operates for three years in disadvantaged communities”.
In later posts, she explained that she wanted to bridge an “opportunity gap” for “black entrepreneurs”.
Student loan relief for Pell Grant recipients is just one component of our plan to reduce the opportunity gap for Black entrepreneurs—along with $12 billion in direct capital. We can ensure Black entrepreneurs have a real shot at starting small businesses. https://t.co/ldwuC9RiIE
— Kamala Harris (@KamalaHarris) July 28, 2019
More recently, Harris toned down the focus on the black community and instead has pushed for loan relief for all students.
In June, she delightedly announced that all Corinthian students will receive loan relief “automatically”.
“All Corinthian will soon receive notice that all Corinthian loans will be cancelled,” she added.
The final decision seemed rushed through the White House on Wednesday and Biden finally signed the bill after some months of deliberation while Harris and her husband enjoyed an unannounced vacation in Hawaii.
“Some think it’s too little. But I believe my plan is responsible and fair,” said Biden.
“It focuses the benefit on middle-class and working families, it helps both current and future borrowers, and it will fix a badly broken system.”
Tweeting from Hawaii, Harris expressed her support for the decision, further indicating that she was the main puppet-master behind it:
“Our administration took action to cancel $10,000 of federal student loan debt for millions of Americans. This announcement will make a meaningful difference for borrowers and their families”.
The Tweet received mixed responses, with many disgusted that their hard-earned dollar will go towards other’s debts, some of whom will earn far more than the average taxpayer.
In a tongue-in-cheek reply, one user said:
“Our Administration took action to redistribute $10,000 of student loan debt to millions of hard-working Americans who were responsible for their own finances. This announcement is expected to literally buy us more votes.
“There, I fixed it for you.”