Sen. Elizabeth Warren rolled out a policy plan that would cancel up to $50,000 in student loan debt for millions of people and provide universal free college to Americans. Warren plans to pay for it by using her proposed tax on the ultra wealthy
In a blog post on Medium Monday, Warren, who is running for president on the Democratic ticket in 2020, called for “something truly transformational” — canceling up to $50,000 in student loan debt for 42 million people in the United States, as well giving Americans the opportunity to attend a two-year or four-year public college tuition free.
The debt cancelation plan would cost the government $640 billion and the universal free college program would cost $1.25 trillion over 10 years, according to Warren.
Student loan debt is a “problem for all of us,” Warren wrote.
“The result is a huge student loan debt burden that’s crushing millions of families and acting as an anchor on our economy,” Warren wrote. “It’s reducing home ownership rates. It’s leading fewer people to start businesses. It’s forcing students to drop out of school before getting a degree.”
Warren, who said she dropped out of college initially at 19 to get married, said she was able to re-enroll on her waitressing salary when tuition was just $50 a semester.
“Higher education opened a million doors for me. It’s how the daughter of a janitor in a small town in Oklahoma got to become a teacher, a law school professor, a U.S. Senator, and eventually, a candidate for President of the United States,” she wrote.
Warren’s idea — which has been criticized as too costly — would rely on her proposed “Ultra-Millionaire Tax.” This would create a 2 percent annual tax for the 75,000 American families with $50 million or more in wealth, Warren said.
“For decades, we’ve allowed the wealthy to pay less while burying tens of millions of working Americans in education debt. It’s time to make different choices,” Warren wrote.
Specifically, her plan would cancel $50,000 in student loan debt for every person with household income under $100,000.
It would also provide a scaled cancelation for households with income between $100,000 and $250,000. This would phase out the $50,000 number by $1 for every $3 in income above $100,000, Warren said. (The campaign provided an example — a person with a household income of $130,000 gets $40,000 in cancelation, while a person with household income of $160,000 gets $30,000 in cancelation.)
‘A silent tax on an entire generation;’ Sen. Eric Lesser asks for more student loan debt oversight in new bill
“This is really a silent tax on an entire generation and is holding hundreds of thousands of people back in our state,” Lesser said in an interview with MassLive.
The cancelation would happen automatically, using data available to the federal government about income and outstanding loan debt, Warren said in her post.
Students who attended private colleges and universities would also be eligible — but the federal government would work with borrowers and holders of those debts to provide relief, Warren said.
The canceled debt would not be taxed as income, Warren said.
She has also proposed investing an additional $100 billion in Pell Grants over the next 10 years and expanding which students have access to these funds.
Pell Grants a government subsidies available for student with financial need who have not earned their bachelor’s degree. They do not need to be paid back.
“Research shows that more funding for non-tuition costs helps improve graduation rates, which must be our goal,” Warren wrote.
Warren also addresses inequities in higher education in her plan.
“It’s not enough to make sure every American can graduate from a public college debt-free. We also need to start fixing our higher education system so it better serves lower-income families and communities of color,” Warren wrote.
The plan will do this in a number of ways including creating a $50 billion fund for Historically Black Colleges and Universities and minority-serving institutions to make sure the spending per student is on par with colleges in the area; making more funding available for states that show improvement in enrollment and graduation for low-income students and students of color; banning for-profit colleges from receiving federal funding and prohibit colleges from considering citizenship status or criminal history in admissions decisions.
While other 2020 candidates have spoken out on student loan debt — Warren is the first to roll on such an ambitious and specific plan. Sen. Bernie Sanders, Rep. Tulsi Gabbard, from Hawaii, and others have supported free two-year college.
Wayne Messam, the mayor of Miramar, Florida who is running for president, has proposed canceling more than $1.5 trillion in student date owed by 44 million Americans, but has not outlined a way to pay for it.
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