Elizabeth Warren Proposes Canceling Student Loan Debt For Millions Of Americans

Photo: Scott Eisen/Bloomberg via Getty Images.
Sen. Elizabeth Warren is unveiling an ambitious higher education plan that includes canceling the student loan debt of millions of Americans and offering tuition-free public college, Refinery29 has learned.
This is the latest proposal put forward by Warren, who has rolled out perhaps the most comprehensive set of policies among the cohort of 2020 presidential hopefuls. The plan, which she is introducing ahead of a CNN town hall focused on young voters Monday, also includes a sweeping set of reforms to address the inequalities that prevent students from low-income families and communities of color from obtaining an education.
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"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," Warren wrote in a Medium post announcing the proposal. "Today, it’s virtually impossible for a young person to find that kind of opportunity."
As of 2018, nearly 45 million Americans owe a collective $1.5 trillion in student loan debt — and more than 16.8 million of them are under the age of 30. Warren is proposing to cancel $50,000 in student loan debt for people whose household income is under $100,000. Those with a household income between $100,000 and $250,000 would still receive some relief, with a cancellation amount of $1 for every $3 for incomes above $100,000.
An example provided by the campaign said a person with a household income of $130,000 would see the cancellation of $40,000 of their student debt, while someone with a $160,000 household income would obtain $30,000 in cancellation. The plan offers no debt cancellation for those whose household income is above $250,000. According to experts consulted by Warren's team, the plan would offer relief to around 95% of the nearly 45 million Americans saddled with student loan debt, with 75% of them seeing their debt totally canceled.
"We got into this crisis because state governments and the federal government decided that instead of treating higher education like our public school system — free and accessible to all Americans — they’d rather cut taxes for billionaires and giant corporations and offload the cost of higher education onto students and their families," Warren said. "The student debt crisis is the direct result of this failed experiment."
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Warren says that broad debt cancellation does not address the current flaws in the system, which is why she is also proposing universal public college as solution. The Massachusetts Democrat wants to offer no-cost undergraduate tuition and fees at all public two-year and four-year colleges in the country. The plan also calls for expanding and redirecting federal grants to pay for non-tuition costs, such as room and board, at public colleges.
According to the Warren campaign, the broad debt cancellation and universal free college plan would cost $1.25 trillion over ten years and would be paid through her "wealth tax" proposal. This annual tax, also known as the "ultra millionaire tax," applies to Americans whose net worth exceeds $50 million and the projected revenue is $2.75 trillion over ten years. (The cost of her universal child care plan would be covered through this tax, too.)
"Sen. Warren’s student-debt and college-affordability proposals give the current generation a chance at financial health," Randi Weingarten, president of the American Federation of Teachers, said in a statement provided to Refinery29. "These proposals are as consequential as the G.I. Bill and would be a game-changer for millions of Americans being crushed by $1.5 trillion in student debt."
The last part of Warren's plan is focused on addressing the roadblocks preventing students from low-income families and communities of color from going to college. This is why the senator is calling for the creation of a fund for historically Black colleges and universities (HBCUs) and minority-serving institutions (MSIs); banning for-profit colleges, which often have predatory practices targeting low-income students, from receiving any federal funding; allowing states to receive additional federal funding if they demonstrate a substantial improvement in enrollment and graduation rates for low-income and minority students; and prohibiting public colleges from considering an applicant's citizenship status and criminal history during the admission process.
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