The US student debt is reaching critical levels with 44 million borrowers that collectively owe a grand total of $1.5 trillion in loan debt. Because of this, Democratic candidates have made easing student loan a top priority.
Amongst all the proposals given, the ones by Senator Elizabeth Warren and Senator Bernie Sanders are the one that stands out the most. However, their rival candidates question the effectiveness of their ambitious goal of relieving borrowers of their debt.
What are the Plans?
Warren was the first to propose a plan that entails widespread cancellation of up to 95% of the borrowers. Her plan includes cancelling $50,000 in debt for every person with a household income under $100,000. Also, households with an income of between $100,000 and $250,000 can opt for a partial debt cancellation. Those who earn more $250,000 a year get no cancellation. Part of her proposal also includes forgiving federal and private student loans.
Meanwhile, Sanders’ approach involves wiping out all student debt. On top of that, households with incomes of $25,000 or less can have their colleges fees covered in full. He also suggested making all community college and universities free of charge. The proposal of making college more accessible is something that many of the other candidates are in favor of as well.
How Will It Be Funded?
All these debts won’t be left unpaid for, and both Warrens and Sanders gave suggestions on how they will be paid off.
For Warrens, she added an Ultra-Millionaire Tax in her campaign. This would give an annual 2% tax on households with a net worth of at least $50 million. It would include the richest Americans in the top 0.1%. On the other hand, Sanders targets the Wall Streets banks for his funding. Additional taxes for Wall Street transactions would be made, and it’s said to generate roughly $2.4 trillion within a decade.
Is it Possible?
Many, including other Democrats, have expressed their concerns and doubts with both these programs. Critics say that both plans would either be too costly or unfair to taxpayers. This makes passing these policies quite uncertain.
Other candidates have given their proposals on the matter. California Senator Kamala Harris suggested forgiving up to $20,000 to those who would start a business that lasts for three years in disadvantaged communities. South Bend, Indiana Mayor Pete Buttigieg wants to reform the public service loan forgiveness program.