Warren unveils $640 billion college debt forgiveness plan

Clay Curtis
April 23, 2019

Democratic 2020 U.S. presidential candidate and U.S. Senator Elizabeth Warren (D-MA) speaks to supporters in Memphis, Tennessee, U.S. March 17, 2019.

The leading 2020 presidential candidate unveiled her plan on Monday, going further than most of other Democratic candidates when it comes to education policies, pledging to cancel nearly all student loan debt for 42 million Americans. According to details shared by her campaign, the massive debt cancellation and free college plan additionally asks states to chip in to cover the cost of tuition and fees.

Her plan would wipe away up to $50,000 in student debt for borrowers with an annual household income of less than $100,000, an estimated 42 million Americans.

Ms. Warren's plan is the most detailed and aggressive so far in attacking that mountain of debt, which is estimated to total $1.5 trillion owed by almost 45 million borrowers. For some education pathways, such as medicine or engineering, taking out student loans is an investment that can later turn into a high-paying job that will allow the student plenty of income to pay off those debts.

Warren's plan would also create a fund with a "minimum of $50 billion" meant to keep per-student spending at historically black colleges and universities and minority-serving institutions comparable to other area colleges. "The student debt crisis is the direct result of this failed experiment", Warren wrote in a lengthy Medium post outlining her proposals.

President Trump himself has declared student loan debt to be one of the nation's greatest burdens, telling students at a White House event on free speech earlier this year that his administration is looking for ways to reduce that burden and make schools take more of the risk. "Policymakers should focus their efforts on reforming the K-12 system to prepare students for college and make higher education truly 'higher.' Offering additional years of taxpayer-funded schooling will likely only worsen the problem of credential inflation". Elizabeth Warren unveils sweeping proposal to eliminate student loan debt and make all public colleges tuition-free; reaction from Peter Morici, former chief economist for the U.S. International Trade Commission.

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Many of Warren's challengers for the nomination are backing the Debt-Free College Act, which would pay for students attending a public college, but stopped short of full debt cancellation. The campaign has called this total loan forgiveness for more than 75% of households with such debt, leaving out the perhaps significant "up to".

As the list of candidates for 2020 continues to grow - here are the people who have already announced their candidacy. "It's forcing students to drop out of school before getting a degree", she said. And rather than stepping in to hold states accountable, or to pick up more of the tab and keep costs reasonable, the federal government went with a third option: pushing families that can't afford to pay the outrageous costs of higher education towards taking out loans.

A four-year degree isn't necessary to fill the holes in the USA economy.

Former New York Mayor Michael Bloomberg, a billionaire who this year briefly eyed a run for Democratic presidential nomination, said Ms. Warren's socialist scheme would turn the US into Venezuela.

Mary Clare Amselem, a policy analyst with The Heritage Foundation, argues, "free college proposals will simply hasten the deterioration of quality education".

There is broad support among the Democratic presidential candidates for making college more affordable, though they differ on how to do so. "They should have to take that vote and live with it for the rest of their lives", she said.

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