You visualizing your student loan debt getting erased
Elizabeth Warren unveiled a plan to cancel student debt and eliminate public college tuition yesterday. Support for Warren, according to a recent poll, is still at 6%, trailing way behind Sanders and Biden. Will the new plan, her biggest policy proposal yet, be enough to finally place her among the top-tier group in 2020 Dem primary race?
Millions of people are in student debt jam
The Massachusetts senator wants to fix the issue by canceling up to $50,000 in student loan debt for 42 million Americans. She says her plan will:
- Cancel debt for more than 95% of the nearly 45 million Americans with student debt
- Wipe out student debt entirely for more than 75% of the Americans with that debt
And here’s how your debt will get canceled under her plan:
- Erase $50K in student debt for every person with household income under $100K.
- The $50K amount phases out by $1 for every $3 in income above $100K, so, for example, a person with household income of $160K gets $30K in cancellation.
- Cancellation will be done automatically using data already available to the govt about income and outstanding student loan debt.
- Private student debt is also eligible for cancellation
- Canceled debt will not be taxed as income.
For people with income above $250K, there’s no debt cancellation. They’ll be alright, tho. They in the top 5%.
Free public college, too?
Her higher education plan includes universal free public college as well. In addition to free tuition, she plans to set aside a $100 billion grant for non-tuition costs like room and board. There will also be a $50 billion fund for Historically Black Colleges and Universities (HBCUs) and Minority Serving Institutions (MSIs) for students of color and especially black students.
Where is she gonna get all that $ from, tho?
Warren has a pretty concrete idea about how she will fund her new policy. She says her “Ultra-millionaire tax policy”, which applies to the top 0.1% (or about 75,000 wealthiest households) where they would pay a 2% tax on net worth above $50M, will fully cover the costs for both student debt cancellation and free public college.
She claims her plans will actually boost the economy as the freed-up money that will go towards economic growth, increase home purchases, and small business formation. There are researches that support her claims, too. For example, a study from Bard College suggested erasing the student debt could boost the GDP by almost $1.1 trillion over the next decade and create up to 1.5 million new jobs per year.