2020 presidential hopeful Sen. Elizabeth Warren (D-Mass.) rolled out her proposal Monday for addressing the student loan crisis, including an estimated $640 billion in debt forgiveness.
In a policy prescription she described as “truly transformational,” Warren said she would seek to cancel up to $50,000 per person for 42 million borrowers. The plan would provide an economic stimulus for the middle class and help reduce inequalities among African American, white and Latino students, she said.
Warren also advocated for making all two- and four-year college programs free of tuition or fees, while expanding Pell Grants by an additional $100 billion to help fund other student costs beyond tuition.
Warren and other candidates have offered a variety of ideas on making college affordable and dealing with the current mass of student debt (see here and here, for example), but Warren’s latest policy plank, unveiled in the online magazine Medium, is among the most comprehensive so far in terms of size and detail.
While the one-time cost of loan forgiveness would run about $640 billion, the free college initiative would require an estimated $1.25 trillion over the first 10 years, Warren said.
She added, however, the costs could be “more than covered” by a separate Warren proposal for a marginal 2% annual tax on wealth above $50 million — something the senator said would impact about 75,000 high net worth families.
In terms of the forgiveness plan, it would offer full forgiveness to those from households with annual incomes below $100,000, while those from families making $100,000 to $250,000 would be eligible for partial forgiveness.
Additional elements of the plan include a special fund for Historically Black Colleges and Universities and Minority-Serving Institutions, as well as prohibiting public colleges from considering citizenship status in its admissions process.
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