Sanders proposes canceling all $1.6 trillion in student debt
Student loan debt relief is quickly becoming a standard policy among Democratic candidates for the 2020 presidential nomination. That's a recognition of just how crippling the $1.6 trillion in debt is not just to the borrowers, but to the entire domestic economy. Now Bernie Sanders has joined Elizabeth Warren and Julián Castro with a plan to relieve the burden on 45 million Americans and provide tuition-free education at public universities, community colleges, and trade schools.
Sanders' plan would wipe clean all debt for attendance at public and private universities and for graduate school. He'd pay for it with a Wall Street tax on financial transactions with a 0.5% levy on stock transactions and a 0.1% tax on bonds. «This is truly a revolutionary proposal,» said Sanders in announcing the plan. «In a generation hard hit by the Wall Street crash of 2008, it forgives all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the 'crime' of getting a college education.»
In comparison, Warren's proposal would cancel up to $50,000 in debt for people with annual incomes of less than $100,000 and create a sliding scale of debt forgiveness for people with higher incomes, capping out at $250,000 and above in annual income. She'd pay for it, and her tuition-free plan, with a «wealth tax.» Ninety-five percent of borrowers would see their debt forgiven under her plan. Castro's would provide partial loan forgiveness for people receiving public assistance under the Supplemental Nutrition Assistance Program, Supplemental Security Income, Temporary Assistance for Needy Families, or Medicaid. His plan would also eliminate tuition at public universities and community colleges, and includes proposals critical to many vulnerable immigrant students, ensuring access to federal funding and eliminating citizenship status in admissions decisions.
Sanders' plan, with its blanket debt forgiveness regardless of income, would offer assistance to people who don't really need it, but that could make it more politically viable. Like Social Security and Medicare, which are available to everyone at all incomes, a universal proposal could be more popular. The benefit would absolutely go to those most in need, because the ratio of debt to income for the bottom 50% of borrowers is so high, and disproportionately a burden to people of color.
Sanders' and Warren's plans particularly would unleash trillions in economic growth and economic freedom for a couple of generations of Americans now tethered to their loans. With tuition-free education, they'd free future generations.