It took Barack and Michelle Obama until 2004 to pay off the last of their student loans. They each carried more than $40,000 in debt from Harvard Law School; combined with their undergraduate loans, they Pomp and Circumstanced their way out of higher education and into a combined total of $120,000 in debt.
Now in their mid-50s, the Obamas were just young enough to catch the front end of a recent American tradition: Starting in the early 1980s and accelerating in the early 2000s, the cost of tuition has soared — recently it has increased at roughly eight times the rate of wages — forcing younger generations to graduate with more and more debt, which takes longer and longer to pay off. Currently, 45 million Americans carry roughly $1.6 trillion in student debt. And black graduates are disproportionately burdened by that weight: As the Brookings Institute found in a 2016 study, “black college graduates owe $7,400 more on average than their white peers… [and] over the next few years, the black-white debt gap more than triples to a whopping $25,000.”
On Monday, Sen. Bernie Sanders (I-VT) proposed a plan to wipe all that debt away.
Among Democratic presidential candidates, his is the most sweeping affordable college plan yet: It would eliminate tuition and fees at all community colleges and all public four-year colleges and universities. As HuffPost reports, Sanders’ bill “would also cap student interest rates at no higher than what the federal government pays for its debt — so that the government isn’t profiting off student loan programs — and provide at least $1.3 billion per year to eliminate or reduce tuition and fees for low-income students at two- and four-year, private nonprofit historically black colleges and universities.”
″[I]n a generation hard hit by the Wall Street crash of 2008, it forgives all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the ‘crime’ of getting a college education,” Sanders said in a statement, calling his plan “truly revolutionary.”
Prior to Sanders’ announcement, the 2020 hopeful with the most comprehensive plan for addressing student loan debt belonged to Sen. Elizabeth Warren (D-MA). Her plan would cover $1.25 trillion for 42 million people — close to what Sanders is proposing, but with caps for people whose household incomes are between $100,000 and $250,000, who would only have a portion of their debt forgiven. Anyone in a household with an income higher than $250,000 would not receive any debt forgiveness.
As HuffPost notes, supporters of the Sanders plan point out that even people in high-income households did not come from high-income families — otherwise, they wouldn’t have taken out loans in the first place. Opponents of Sanders’ full measure approach say that the government shouldn’t be covering debt for people who could afford to pay it off themselves.
Warren’s plan would be paid for by her “Ultra-Millionaire Tax – a 2% annual tax on the 75,000 families with $50 million or more in wealth,” as she said when she announced her free college and debt forgiveness plan back in April. Sanders says his plan would be paid for with a tax on Wall Street speculation. To that end, in May, he and Rep. Barbara Lee (D-CA) introduced legislation which would tax the trades of stocks, bonds, and derivatives. According to Sanders and Lee, this tax “is estimated to generate up to $2.4 trillion in public revenue from wealthy investors over 10 years.”