Archive for Ayelet Sheffey

15 million student-loan borrowers would be completely debt-free if Biden fulfilled his campaign promise

President Joe Biden at a podium at the White House.
President Joe Biden.
  • Fifteen million borrowers would have their student debt completely wiped out with Biden's $10,000 forgiveness promise.
  • Data obtained by Sen. Elizabeth Warren also found 36 million borrowers would be debt-free if Biden were to forgive $50,000 per borrower.
  • Biden has yet to fulfill his campaign promise as pressure ramps up for broad student debt cancellation.

President Joe Biden campaigned on canceling $10,000 in student debt per borrower. He has yet to fulfill that promise, and Education Department data provided to Massachusetts Sen. Elizabeth Warren shows why so many borrowers are counting on it.

Warren, who has been a leading lawmaker calling for broad student debt cancellation, asked the Education Department in April for information on how many borrowers would benefit from various levels of loan forgiveness. The department delivered in August, showing that of the 45 million borrowers bearing the $1.7 trillion student-debt crisis, over 15 million would have their student debt completely wiped out if Biden fulfilled his promise.

Under Warren's proposal to cancel $50,000 in student debt per borrower, more than 36 million would see their balances turn to zero.

"Cancelling $50,000 in student debt would completely wipe out student loans for 84% of borrowers, including more than 3 million borrowers who have been repaying their loans for more than 20 years," Warren told Insider. "This is the single most effective executive action President Biden could take to jumpstart our economy and begin to narrow the racial wealth gap."

The data also revealed that of the 10.3 million borrowers in default on their debt, 9.8 million of them would see their burdens completely forgiven with $50,000 in cancellation.

In nearly 100 days, millions of student-loan borrowers will have to start making payments on their debt after a close to two-year pause. Though the Education Department is reportedly preparing a "safety net" for borrowers to restart those payments, broad student-debt cancellation doesn't appear to be one of the relief measures under consideration.

While Biden has canceled $11.5 billion in student debt so far for targeted groups of people, like those defrauded by for-profit schools and borrowers with disabilities, he has not responded to lawmakers' and advocates' calls for broad debt cancellation. The urgency of ths move is ramping up as the pandemic freeze on student-loan payments is set to lift on February 1.

The review on Biden's legal ability to cancel student debt broadly has been in the works for over 6 months

White House chief of staff Ron Klain told Politico in April that Biden had asked Education Secretary Miguel Cardona to create a memo on the president's legal authority to forgive $50,000 in student loans per person. White House Press Secretary Jen Psaki said in February that Biden would also ask the Justice Department to review his authority to use executive action to cancel student debt, but it's unclear when the department began that review.

Given that details of the reviews had still not been made public, two weeks ago, a group of House Democrats led by Minnesota Rep. Ilhan Omar gave the Education Department 14 days to release the memo. They wrote in a letter to Cardona that with the pandemic pause on student-loan payments lifting in February, borrowers were "anxiously awaiting the administration's actions."

"The time has come to release the memo and cancel student debt," they added, setting a deadline of October 22.

Psaki said during a press briefing earlier this month that she did not have any update on the memos, but that Biden would support legislation brought to him from Congress to cancel student debt.

But Warren previously said that she didn't want to go the legislative route.

"We have a lot on our plate, including moving to infrastructure and all kinds of other things," Warren said, adding: "The president can do this, and I very much hope that he will."

Do you have a story to share about student debt? Reach out to Ayelet Sheffey at [email protected]

Read the original article on Business Insider

One of the biggest student loan companies in the US gets approval to shut down its services

college graduation
  • The Education Dept. approved student-loan company Navient's request to shut down its services.
  • The 6 million federal borrowers under Navient will be transferred to another company, Maximus.
  • Federal Student Aid head Richard Cordray said Maximus will be held to higher standards.
  • See more stories on Insider's business page.

The Education Department on Wednesday approved student-loan company Navient's request to shut down its federal services, becoming the third company to do so this year before student-loan payments resume in February.

According to a press release last month, the six million borrowers who currently pay their federal student loans to Navient will be transferred to Maximus, a company that services government loans. The Pennsylvania Higher Education Assistance Agency (PHEAA) and Granite State Management and Resources, servicing a combined 10 million borrowers, are ending their contracts, as well.

Federal Student Aid head Richard Cordray said in a statement the agency's confidence in the handover "is bolstered by the fact that Maximus will be held to the stronger standards for performance, transparency, and accountability that FSA included in its recent servicer contract extensions."

Navient announced their request to transition their federal accounts to Maximus last month, and Navient CEO Jack Remondi wrote in a blog post that both Navient and Maximus have been working with the Education Department over the past months to ensure a smooth transition for the borrowers, saying he is "confident borrowers will continue to be well-served" during and post-transition.

"Maximus will be a terrific partner to ensure that borrowers and the government are well served, and we look forward to receiving FSA approval," Remondi said.

This was welcome news to lawmakers like Massachusetts Sen. Elizabeth Warren, who has held Navient in her sights for years and accused it of misleading borrowers.

"Navient has spent decades misleading, cheating, and abusing student borrowers," Warren told Insider following Navient's announcement last month. "The Federal student loan program will be far better off without them."

Insider reported in April that during a hearing on student debt, Warren told Remondi that he should be fired for "actions that ripped off borrowers," including the improper marketing of loans and failing to notify borrowers of their rights.

And Student Borrower Protection Center Executive Director Seth Frotman said in a statement that "millions of Americans with student loans will no longer be forced to rely on a company that puts padding its own profits at the expense of its customers."

Notably, Cordray said during remarks at a conference earlier this month that student-loan companies are choosing to shut down rather than face more accountability. To be sure, he did not comment on specific companies but noted that "not everybody was thrilled" with his plans to strengthen oversight of the industry.

Navient's transfer of 6 million borrowers will likely add to the administrative burdens the Education Department will be tasked with in February. Student-loan payments have been on pause for the duration of the pandemic, and the department will have to restart those payments for the 43 million borrowers with federal student loans, along with transitioning 16 million borrowers to new student-loan companies.

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Student loans are a ‘lifetime sentence’ that 66% of Black borrowers regret taking on

College graduate sitting outside
College graduate sitting outside.
  • The Education Trust released a survey examining the impacts of student debt on Black borrowers.
  • It found 66% of them regret taking out a loan, deeming the debt "unpayable" and "not worth it."
  • Student debt unevenly impacts Black borrowers, with many pushing for full student debt cancellation.

The $1.7 trillion student debt crisis falls on the shoulders of 45 million Americans, but it disproportionately burdens Black borrowers. A new report found the majority of those borrowers wish they never took out a loan in the first place.

The Education Trust, a nonprofit that advocates for student success, launched the National Black Student Loan Debt Study last year. They ran a nationwide survey of nearly 1,300 Black student-loan borrowers, mostly four-year degree holders making over $50,000 annually. The nonprofit released the results of the survey on Wednesday and found that 51% of the borrowers have yet to see positive returns on their debt, and 66% of them regret ever taking out loans, deeming them "unpayable" and "not worth it."

"More than half of the Black borrowers in our study said they do not believe that student loans advance racial equality for Black borrowers (58%) or increase Black borrowers' ability to build wealth (61%)," the report noted, adding that many borrowers viewed their debt as a "lifetime sentence."

The report also analyzed the impact of the income-driven repayment plan (IDR) on Black borrowers, which is supposed to set monthly payments for borrowers based on what is affordable for their incomes and family sizes, with any remaining student debt being forgiven after a set number of years in repayment.

But, as the report noted, of the 2 million who became eligible for forgiveness under IDR plans in 2019, only 32 borrowers actually received it. The failures of IDR especially hurt Black borrowers - 72% of those surveyed were under the income-driven repayment plans. Of those surveyed borrowers, 71% of them said they had trouble affording a savings account, and 67% reported the loans having a negative impact on their mental health.

Although the student-loan system was created with President Lyndon B. Johnson's goal to curb racial and income inequality in mind, the opposite ended up happening, placing the student debt burden disproportionately on communities of color.

Insider has previously reported on this disproportionate burden. US Census data revealed in August that even if they didn't finish college, Black student-loan borrowers carry the same debt burden as a white adults with an advanced degree.

Housing and Urban Development (HUD) Secretary Marcia Fudge told Axios in June that poor people and people of color hold a disproportionate amount of student debt, requiring reform. "Who has student debt? Poor people, Black people, brown people," Fudge said. "We're the people who carry most debt. And so the system's already skewed toward us not being creditworthy."

That's why advocates and lawmakers are pushing for at least $50,000 in student debt cancellation to allow students to seek educations without being followed by debt for the rest of their lives.

"Even during times of economic normalcy, student debt is a policy failure," Democrats wrote to Education Sec. Miguel Cardona earlier this month. "Turning student debt payments back on in the middle of a pandemic is an act of policy failure. Cancelling student debt is both the morally right and economically sound thing to do."

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Meet a married couple with $130,000 in student debt after paying off $140,000 –┬ábut they started with just $54,000. ‘The loans have always stayed one step ahead of us.’

college students graduation
  • Ron and Marcia Rizzardi started out with a combined $54,000 in debt from their own educations.
  • Over the past 25 years, they've made $140,000 in payments, but today they owe $130,000.
  • It comes down to the high interest rates that prevent people from making even a dent in their principal balance.

After Ron and Marcia Rizzardi got married in 1992, they thought consolidating their student loans was the best financial option for them.

But now, thanks to sky-high interest rates, the Arkansas-based couple owes $130,000 in student debt even though they've made $140,000 in payments over the past 25 years. They've paid off their original loan amount of $54,000 nearly three times over.

"The loans have always stayed one step ahead of us," Marcia told Insider. "It has affected every aspect of our lives."

'We have paid back the original loan and much more'

After leaving the US Air Force in the early 1990s, Ron, now an engineer, went to school to obtain a degree in aviation. To supplement his part-time work as a certified flight instructor, Marcia took out student loans to obtain a master's degree in education - she's still employed in the field. But a few years later, after their two daughters were born, Ron experienced two layoffs and Marcia suffered an injury that put her out of work, causing them to defer their student-loan payments.

But deferring those payments didn't quite give them the relief they hoped for because interest continued to accumulate in the meantime. That's what has "always kept them out of reach" of even making a dent in their principal balance, Ron said.

Their debt load also held them back from saving up for their daughters' education, requiring the couple to take out parent PLUS loans - the most expensive type of loan, which covers the cost of attendance at a college and is not based on income. Those loans have added another $100,000 to their overall debt load. Their daughters also took out student loans themselves while getting their degrees at state universities.

Now, Ron doesn't see himself retiring until he's at least 75 years old, and once the pandemic freeze on student-loan payments lift in February, the couple is looking at $1,600 monthly payments for the foreseeable future.

"It's not like we haven't paid back the money," Marcia said. "We have paid back the money. We have paid back the original loan and much more."

'I fully expect this debt will follow me to my grave'

Both Ron and Marcia enjoy the jobs they have, which can be credited to the degrees they paid for. But they say the high interest rates on their debt eat away at that joy every day.

"We're literally paying for the privilege of these jobs every month," Marcia said.

Interest rates on federal student loans increased in July, with a 3.73% rate for undergraduate loans, a 5.28% rate for graduate loans, and a 6.28% rate for PLUS loans. Insider previously reported that the majority of borrowers who've made at least one payment during the pandemic pause didn't reduce their underlying debt-loads by even $1 - they were just reducing interest.

Other borrowers who took out PLUS loans to ensure their kids could receive an education have told Insider they're looking at student-debt payments for the rest of their lives, thanks to the high interest rates.

"I'm looking at paying $3,000 a month for the better part of the rest of my life," Reid Clark, who took out $550,000 to send his five kids to school, previously told Insider. He estimates he'll have to keep making those payments for at least three more decades.

Ron and Marcia say they live on a "shoestring budget" to keep up with their student debt payments, after living paycheck to paycheck while raising their daughters. But they made it clear they are not looking for any type of handout. They just want their loan to be considered repaid - because it has been.

"I fully expect this debt will follow me to the grave," Ron said. "My only comfort is that it will go away when I die."

Do you have a story to share about student debt? Reach out to Ayelet Sheffey at [email protected]

Read the original article on Business Insider

Student-loan companies chose to shut down rather than face more accountability, says a top Biden official

College graduate sitting outside
College graduate sitting outside.
  • Two student-loan companies that service a combined 10 million borrowers are shutting down this year.
  • Federal Student Aid Director Richard Cordray said the companies didn't want more accountability.
  • He plans to hold the companies to higher standards to help better protect borrowers.
  • See more stories on Insider's business page.

In recent months, Biden's Education Department told student-loan companies they would be facing a stricter set of rules than under the Trump administration. Some of them decided to shut down instead.

In remarks obtained by Politico, Director of the Education Department's Federal Student Aid (FSA) office Richard Cordray said that one of his goals as head of the FSA is to hold the companies that collect borrowers student debt to higher standards - and those standards pushed some companies to refrain from renewing their contracts with the government.

"Not everybody was thrilled" with the new standards, Cordray said. "But we have stuck to our guns. Some servicers have decided to exit the program rather than contend with these new realities."

Two student-loan companies are shutting down in December, causing nearly 10 million borrowers to transition to new servicers before the pandemic payment pause ends.

The Pennsylvania Higher Education Assistance Agency (PHEAA) and Granite State Management and Resources announced in July they would be shutting down their loan services in December. Granite State has already announced where its borrowers will be transferred, but PHEAA - which currently services 8.5 million borrowers - has yet to do so and has come under fire by advocates and lawmakers for misleading borrowers, prompting increased oversight.

After announcing that it was shutting down its loan services, a PHEAA spokesperson told Insider in a statement that student-loan programs had "grown increasingly complex and challenging while the cost to service those programs increased dramatically."

The company did not respond to Insider's request for comment regarding accusations the company has misled borrowers, but Massachusetts Sen. Elizabeth Warren said borrowers can "breathe a sigh of relief" knowing they will not be serviced by PHEAA, and Seth Frotman, executive director of the Student Borrower Protection Center, recently told Insider it's a "good thing" the company is shutting down its services.

"Borrowers no longer being forced to deal with this company is a good thing," Frotman said. "At the heart of every student loan scandal that hurt borrowers, PHEAA was at the center, from harming teachers, to military borrowers, to public servants."

Cordray's plan to increase accountability measures for student-loan companies is something lawmakers like Warren have been pushing for, and doing, for years. In April, Warren invited the CEOs of all student-loan companies to testify on the impact of student debt on borrowers, and she called out the CEO of Navient, saying he should be fired for the company's actions in misleading borrowers.

PHEAA CEO James Steeley also testified, and Warren later sent him a letter over what may have been false testimony before Congress.

Cordray said the FSA will collaborate with the Consumer Financial Protection Bureau and the Justice and Treasury Department to help boost oversight, and he said the student-loan companies who are renewing their contracts have "embraced a new normal of 'putting borrowers first.'"

"We will work closely in partnership with our servicers to make sure we deliver quality service to everyone who faces the prospect of repaying their student loans," he said.

Read the original article on Business Insider

Mitch McConnell says the GOP will vote for the US to default on its debt

Mitch McConnell
Senate Minority Leader Mitch McConnell.
  • Pelosi and Schumer said they would attach a debt-ceiling suspension to the government-funding bill.
  • McConnell quickly struck down the idea, saying the GOP would not vote for the legislation.
  • They effectively dared him to vote for the US to default on its debt, and he met their dare.
  • See more stories on Insider's business page.

As the White House stressed the urgency of raising the debt ceiling to avoid a government default, House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer said on Monday that the House would pass legislation to fund the government that includes a debt-limit suspension through the end of next year.

It was a dare to Senate Minority Leader Mitch McConnell, who would need to lend ten Republican votes for it to avert the filibuster and clear the Senate. The Kentucky Republican was unfazed.

"We will not support legislation that raises the debt limit," McConnell said after Pelosi and Schumer's announcement. "Democrats do not need our help."

Treasury Secretary Janet Yellen told Congress earlier this month that the government's money would likely run out in October because of financial uncertainty caused by the pandemic.

Pelosi and Schumer said in a joint statement on Monday that the House would pass legislation before October to fund the government through the end of the year and tack on a debt-ceiling suspension through December "to once again meet our obligations and protect the full faith and credit of the United States."

"Addressing the debt limit is about meeting obligations the government has already made, like the bipartisan emergency COVID relief legislation from December as well as vital payments to Social Security recipients and our veterans," the lawmakers wrote. "Furthermore, as the Administration warned last week, a reckless Republican-forced default could plunge the country into a recession."

Republican lawmakers have said they won't get involved with raising the debt limit and want Democrats to go at it alone, citing their "irresponsible spending" on a $3.5 trillion social-spending bill. Yet renewing the nation's ability to borrow and pay its bills - known as the debt ceiling - also deals with covering spending obligations that Congress already approved.

Democrats are assailing what they view as Republican hypocrisy, noting the national debt grew nearly $8 trillion under President Donald Trump - chiefly on the back of GOP tax cuts and bipartisan emergency spending packages during the pandemic. Republicans supported raising the debt ceiling three times during the Trump administration.

By tacking on the debt ceiling to the government-funding legislation, Pelosi and Schumer are daring the GOP to vote for a default. "The American people expect our Republican colleagues to live up to their responsibilities and make good on the debts they proudly helped incur in the December 2020 '908' COVID package that helped American families and small businesses reeling from the COVID crisis," Pelosi and Schumer wrote, referring to the December stimulus package passed under President Donald Trump.

On Sunday, Pelosi wrote in a letter that every time the debt limit has needed to be raised, "Congress has addressed it in a bipartisan basis." On the same day, Yellen urged Congress to come together to raise the limit, citing the "economic catastrophe" that could result with the failure to do so.

A large majority of Senate Republicans are retrenching and following McConnell's lead, saying they'll cast a vote against the measure. They're also insisting that Democrats can employ reconciliation, the same party-line process that's being used to muscle through a $3.5 trillion social spending package.

"[Democrats] got the votes to keep us from defaulting, let's see what they do," Sen. Richard Shelby of Alabama, the ranking member in the Appropriations Committee, told Insider.

Shelby was among a handful of GOP senators who didn't sign onto a pledge in August to oppose lifting the debt ceiling. That roster included Sen. Susan Collins of Maine, who was pressed by reporters on whether she supported raising the borrowing cap. "I'm not answering that," she said.

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Janet Yellen says she wouldn’t be Treasury Secretary today if she ‘didn’t have an excellent babysitter 40 years ago’

Janet Yellen smiling in front of a microphone
Janet Yellen.
  • Treasury Sec. Janet Yellen credits "excellent" childcare for her professional success.
  • She urged Congress to invest in affordable childcare in the $3.5 trillion social spending bill.
  • The Treasury released a report on Wednesday detailing the lack of accessible childcare for parents.
  • See more stories on Insider's business page.

Janet Yellen is the first female Treasury Secretary of the US, but she said it might not have been possible without the childcare made available to her after giving birth to her son four decades ago.

"Looking back, I'm not sure I would be here, in this job today, if I didn't have an excellent babysitter 40 years ago," Yellen said during remarks on Wednesday on shortages in the childcare system.

Yellen joined Vice President Kamala Harris at the Treasury Department in urging for increased investments in childcare, and she said that while she was lucky to have given her son great childcare, it is certainly not the norm for most families today. The Treasury released a report on Wednesday that found parents need childcare at a time when they can least afford it - right when they give birth - and there is currently no funding mechanism, stressing the need for reform.

"For the vast majority of Americans, the child care industry works in precisely the opposite way it worked for us, which is to say it doesn't work at all: Those who provide child care aren't paid well, and many who need it, can't afford it," Yellen said.

House Democrats recently unveiled their plan to invest $761 billion to make childcare more affordable as part of their social spending bill, which included a universal pre-K for three- and four-year-olds and investments to ensure children do not go hungry. It also includes a cap on families' spending on childcare at 7% of income so anyone who wants care can afford it, regardless of how much money they make.

Insider reported on Tuesday that 110 economists echoed Yellen's calls in a letter stressing the importance of affordable childcare in Democrats' $3.5 trillion social spending bill. Betsey Stevenson, a top economist under Obama and one of the letter' signatories, told Insider in an interview that the "fundamental flaw" in childcare is the lack of investment.

"What we have done is create a nation of kids who are underinvested in, and that feeds into not just what our potential is as an economy, but it also feeds into inequality," Stevenson said.

Democrats are in the process of debating elements of the reconciliation bill, including an expanded $300 monthly child tax credit, but where benefits for children and families stand remain uncertain given hesitation from centrist lawmakers, like West Virginia Sen. Joe Manchin, who wants a work requirement for the benefits.

But Yellen said during her remarks it's "past time that we treat child care as what it is - an element whose contribution to economic growth is as essential as infrastructure or energy."

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4 reasons Congress should permanently expand $300 monthly child tax credits, according to more than 400 economists

Nancy Pelosi and Chuck Schumer
Nancy Pelosi and Chuck Schumer.
  • 410 economists urged Congress to make permanent $300 monthly checks to families with children.
  • They wrote in a letter the child tax credit will significantly reduce childhood poverty in the US.
  • Democrats are clashing over how to include the credit in their $3.5 trillion social spending bill.
  • See more stories on Insider's business page.

As Senate Democrats clash over what an expanded child tax credit will look like in their $3.5 trillion social spending bill, over 400 economists laid it out simply: the credit should be made permanent to combat child poverty in the country.

On Wednesday, 410 economists, led by Berkeley economics professor Hilary Hoynes and Director of Northwestern's Institute for Policy Research Diane Schanzenbach, sent a letter to House and Senate leadership urging them to make the expanded child tax credit permanent.

The signatories, which included former top Obama administration economists Jason Furman and Betsey Stevenson, wrote that childhood poverty is a "staggering problem" in the US, affecting approximately one in seven children and indefinitely impacting their livelihoods as they grow up.

"Children growing up in poverty begin life at a disadvantage: on average they attain less education, face greater health challenges, and are more likely to have difficulty obtaining steady, well-paying employment in adulthood," the economists wrote. The National Academy of Sciences estimated that because of those difficulties, child poverty has cost the country between $800 billion and $1.1 trillion each year.

The economists outlined four reasons why expanding, and making permanent, the child tax credit would be beneficial:

  1. It would dramatically reduce poverty and improve children's lives by improving childrens' health and educational attainment;
  2. It would be a long-term investment and bring in more tax revenue down the road by reducing government medical spending for children;
  3. It would have minimal impact on employment given that the credit would phase out for high levels of earning;
  4. And the vast majority of people use the credits to pay for necessities, like food and utilities.

President Joe Biden expanded the child tax credit through December in his stimulus law, in which individuals who earn $75,000 or less are eligible for up to either a $250 or $300 direct payment per child depending on their age.

Insider's Madison Hoff reported last month that just the first round of payments managed to keep 3 million children out of poverty, signaling the substantial impact a further expanded credit would have for children and families across the country.

But Congressional Democrats are divided on basic provisions of the program, including how long to extend it and whether low-income families who don't have to file taxes should be able to receive advance monthly payments, known as fully refundability.

House Democrats proposed renewing the program until 2025 in their social spending plan, along with locking in full refundability for families that don't earn enough to pay taxes.

But the structure of the program could change due to resistance from Sen. Joe Manchin of West Virginia, a key centrist. He's pushed a work requirement for parents to receive the credit. He told Insider on Tuesday that the benefit should only go to people paying taxes.

Many Democrats are balking at the idea, including architects of the measure like Rep. Suzan DelBene of Washington and Sen. Michael Bennet of Colorado.

"I think it's already clear in the country the incredible benefits the child tax credit is delivering to families and I hope to find a way to preserve it in its current form," Bennet told Insider on Tuesday.

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A House Democrat says he wants a labor market ‘so tight’ that people with tattoos won’t have to cover up to get hired

Rep. Brad Sherman
Rep. Brad Sherman.
  • Rep. Brad Sherman told WSJ he wants a labor market "so tight" that people with tattoos can easily get hired.
  • This was in regards to his support for Powell's reappointment to Fed Chair.
  • Democrats are debating the reappointment, with progressives wanting a new chair who is more climate-focused.
  • See more stories on Insider's business page.

As debate among Democrats continues over whether to appoint Federal Reserve Chairman Jerome Powell to another four-year term, one lawmaker expressed his support for Powell and what it would mean for people looking for work.

"I want a labor market so tight that you don't even have to cover up your tattoos to get a job," California Rep. Brad Sherman told the Wall Street Journal. "I want employers camped out in front of my office begging for my help in how to hire people getting out of federal prison."

Sherman was talking about a meeting he had with Powell in 2019, when the Fed chair asked him for help in hiring the newly paroled from federal prisons. Sherman said he wanted to have another one of those meetings, and he's worried about any agenda that might take the Fed's focus off of establishing a tighter labor market.

Sherman's office did not immediately respond to Insider's request for comment.

Powell's term is set to end in February, and the Biden administration is currently deciding whether to keep him in the position. Treasury Secretary Janet Yellen - a former Fed chair herself - has told White House advisers she wants to see Powell stay at the central bank, and Biden advisers are leaning toward recommending a second term for Powell, according to Bloomberg.

But progressives, including New York Rep. Alexandria Ocasio-Cortez and Massachusetts Rep. Ayanna Pressley, are urging Biden to oust Powell in exchange for a head of the central bank that would prioritize climate change and racial justice.

"To move forward with a whole of government approach that eliminates climate risk while making our financial system safer, we need a Chair who is committed to these objectives," Ocasio-Cortez, Pressley, and two other Democratic colleagues said in a statement last month.

Along with Sherman, though, some more centrist Democrats have concerns that progressives are taking the focus off of Fed priorities. Jon Tester, a centrist Democrat from Montana, told the Journal that a Fed chair "should not be involved in the political footballs thrown around on Capitol Hill."

"That's the reason I want Jerome Powell," Tester added. "He's proven he can maintain the independence of the Fed."

House lawmakers do not get a vote on Powell's reappointment, but as Insider's Ben Winck previously reported, the Fed has not been silent on the issues progressive lawmakers brought up. Central bank officials have increasingly looked into how the climate crisis endangers the financial sector and the broader economy, and the Fed's latest framework - rolled out in August 2020 - seeks to create a more inclusive and equitable labor market.

The Senate Banking Committee will is set to hold the confirmation hearing for Biden's Fed chair nominee.

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Wisconsin school board president who backtracked on canceling free school lunch says it opened his eyes because ‘I eat every meal every day. I cannot relate to being hungry.’

Montana school lunch
  • Waukesha was the only school district in Wisconsin to opt out of Biden's free lunch program.
  • This week, it opted back in, with board members saying they were unaware of the hunger in their district.
  • But it was a 5-4 vote, and some members likened free lunch to mask mandates.
  • See more stories on Insider's business page.

Waukesha, a Wisconsin school district, voted in June to opt out of President Joe Biden's free school lunch program under the argument that children and families could become "spoiled" with free meals. But nearly two months later, and after widespread criticism, the district opted back into the program and admitted they didn't know how many children go hungry.

The Milwaukee Journal Sentinel reported on Monday that by a 5-4 vote, the Waukesha school board rescinded its previous decision and chose to opt back into the pandemic free lunch program, which gives free meals to all K-12 students, regardless of income. Superintendent James Sebert asked the board members to reconsider their decision, and after weighing the feedback the board had received, Board President Joseph Como said he hadn't been aware of all the situations of hunger in the district.

"I appreciate your input very much," Como said. "I eat every meal every day. I cannot relate to being hungry. I've been blessed."

Another board member, Greg Deets, added that he first voted to opt out of the free school lunch program because he didn't know the full extent to which students in the district go unfed.

"I made the earlier votes without really looking at all the implications and I wasn't really informed and I apologize for that," Deets said. "The truth is that many of our students are hungry throughout the school day and we have the ability to do something about that."

But, as the Journal reported, other board members didn't feel the same way. Karin Rajnicek, the school board member who made headlines for saying free school meals could make students and families "become spoiled," defended her comments at the board meeting and said she was speaking from her own experience with feeling spoiled by free meals for her children.

And other board members said the change of course to opt into school meals was just giving into intimidation.

"If it's food and free lunch today, it will be forced masking, forced whatever-we-want-to-do in schools because the mob will have the power to tell us what to do," board member Anthony Zenobia said.

Before reversing course, Waukesha was the only school district in Wisconsin to opt out of the pandemic free lunch program, which extends through spring of 2022, and instead chose to remain in the the National School Lunch Program, which requires families to fill out an application to qualify for free or reduced-price school meals.

"It's the student that's in the lunch line... that stands there when there isn't money to pay the bill. It's the student that has to go back and sit at the table," Deets said. "I think we should do whatever we can so that students in our district don't have to experience those situations."

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