Sen. Bernie Sanders unveiled his plan Monday on how to deal with ballooning student loan debt – essentially, to wipe it out and make college free.
The Democratic presidential candidate who most embraces socialist policies unveiled the legislation the week of the first Democratic presidential debates. In addition to wiping out all $1.6 trillion in student loan debt — including private and graduate student loan debt — it would also make public universities, community colleges and trade schools tuition free.
Wiping out current debt and paying for future foregone tuition would be done through a tax on Wall Street speculation — 0.5 percent on stock trades, a 0.1 percent fee on bonds, and a 0.005 percent fee on derivatives. Sanders, D-Vermont, and other sponsors of the bill claim those taxes would raise $2.4 trillion over the next decade, which they said would pay for the full cost of the changes.
The nonpartisan Tax Policy Center has previously analyzed a similar plan by Sanders that claimed such a tax would only raise around $50 billion to $60 billion per year, putting a decade’s worth of revenue at between $500 billion and $600 billion, depending on how many trades are discouraged by the new tax.
Universities and other qualifying institutions would not be forced to participate — they would only qualify for the funding if they met certain requirements. Those include covering all costs of higher education, such as campus housing costs, for students from families with income less than $25,000. Private debtors also cannot be forced to comply with erasing the student debt they hold.
Here are the policy positions of the other top four Democratic presidential candidates on how to deal with the increasing problem of student debt.
Former Vice President Joe Biden has not explained exactly how he would deal with this issue. The one policy proposal that deals with student loan debt on his website says “Biden will see to it that the existing Public Service Loan Forgiveness Program is fixed, simplified, and actually helps teachers.”
He made comments about supporting guaranteed education past high school in a Rose Garden speech in 2015, but he has not made any specific policy proposals to back it up.
“We need to commit to 16 years of free public education for all our children,” Biden said at the time. “We all know that 12 years of public education is not enough. As a nation, let’s make the same commitment to a college education today that we made to a high school education a hundred years ago.”
He has also been criticized by progressive groups for voting for proposals that put hardships on those with student loan debt and for not supporting proposals that would have eased some of the burden in the 1990s and early 2000s.
Sen. Elizabeth Warren, D-Massachusetts, has a plan similar to Sanders’ that doesn’t go quite as far. Hers would eliminate most student loan debt — she estimates about 95 percent — but not all of it. Those who make $250,000 or more annually would not qualify, and lower incomes would be eligible to have theirs dismissed up to a capped amount — for example, those making less than $100,000 qualify to have up to $50,000 in student loan debt forgiven.
Her team estimated it would totally eliminate debt for about 75 percent of people with current student loan debt.
Her plan would also make public college tuition free and she said private debt is also eligible for cancellation under her plan. She would pay for it with what she calls an “Ultra-Millionaire Tax” a tax on the wealthiest 75,000 households to pay an annual tax of 2 percent on each dollar of their net worth above $50 million, plus an additional 1 percent tax for every dollar above $1 billion.
Warren says that tax would raise $2.75 trillion over 10 years, fully paying for her proposal. Tax experts have called into question if such a tax is currently feasible, since it would require the Internal Revenue Service to calculate the net worth of each of those families — requiring a lot more manpower at a historically overworked agency. Conservatives have also questioned if she’s over-estimating how much the tax would raise.
Sen. Kamala Harris, D-California, has not introduced her own plan to deal with student loan debt in the Senate. But she was a cosponsor of a past iteration of Sanders’ bill that would have made public colleges tuition free, along with Warren and five others.
“As president, she’ll provide relief from crushing debt today, and ensure tomorrow’s students can attend college debt-free,” her campaign website reads.
Specifically, it says she supports refinancing of current student loans with high interest rates, expanding Income Based Repayment and eliminating for-profit colleges and lenders. She said she supports making community college free and making four-year public college debt-free.
In 2016, the former California attorney general fought for students whose families make less than $140,000 per year to go to college for free.
South Bend Mayor Pete Buttigieg has also advocated for making public colleges “debt free,” through a combination of making it more affordable for middle-class families and free for low-income families. But he hasn’t offered a specific plan to detail how that would look or what would pay for it.
He has also been critical of plans such as Warren’s and Sanders’ that includes widespread forgiveness of debt, saying it’s unclear how the government could pay for it. He does say he supports discussion on refinancing high-interest loans.
He and his husband have about $130,000 in student loan debt currently, according to the Associated Press.