Among the myriad proposals that Sen. Elizabeth Warren (D-MA) has offered up while on the 2020 campaign trail is a plan to confront the nation’s growing student loan crisis by cancelling a significant amount debt currently held by tens of millions of Americans. Now, with an assist from House Majority Whip James Clyburn (D-SC), Warren will move the timetable on this proposal up, with an eye toward introducing legislation in a few weeks’ time.
As Roll Call’s Niels Lesniewski reports, this Warren-Clyburn team up is set to happen ahead of the South Carolina representative’s “World Famous Fish Fry,” which is one of those primary season confabs that traditionally draws Democratic presidential candidates to South Carolina to parlay with state Democratic officials and voters eager to hear from the contenders. Per Lesniewski:
According to a statement provided to CQ Roll Call, the student loan debt relief legislation would terminate up to $50,000 in student loan debt per borrower. The two lawmakers say the proposal, which they plan to introduce sometime in the coming weeks, would help 95 percent of borrowers, with three-quarters of people with student loans seeing their debts wiped out entirely.
These details broadly track with the proposal Warren pitched on her campaign’s blog at Medium. There, Warren provided the brass tacks:
My plan for broad student debt cancellation will:
Cancel debt for more than 95% of the nearly 45 million Americans with student loan debt;
Wipe out student loan debt entirely for more than 75% of the Americans with that debt;
Substantially increase wealth for Black and Latinx families and reduce both the Black-White and Latinx-White wealth gaps; and
Provide an enormous middle-class stimulus that will boost economic growth, increase home purchases, and fuel a new wave of small business formation.
Warren plans to pair her debt relief proposal with a plan to prevent the next student loan crisis by opening the door to a free college education that would give “every American the opportunity to attend a two-year or four-year public college without paying a dime in tuition or fees.” Warren has proposed that the proceeds for her universal free college plan to be paid for via what she calls an “Ultra-Millionaire Tax ,” which would levy a 2% tax on the 75,000 families with $50 million or more in wealth annually.
Warren’s plan would focus on debt cancellation for the most needy borrowers — those who earn incomes of $100,000 or less would receive $50,000 in student loan forgiveness. Higher income earners would receive progressively less until the $250,000 in annual income threshold is hit, at which point those borrowers would earn no debt forgiveness. The plan would be less beneficial to borrowers who have obtained advanced degrees, though the underlying assumption is that such borrowers have a better chance at parlaying their education into better paying jobs.
As ThinkProgress’ Casey Quinlan reported, Warren’s deal would very beneficial to women who hold student loan debt in particular, as they carry nearly two-thirds of the country’s outstanding student loan debt — estimated to be around $929 billion — according to a 2018 report from the American Association of University Women.
Warren is not the only 2020 candidate to take up the matter of student debt. Former Obama era Housing Secretary Julian Castro has also released a comprehensive plan to alleviate the burdens of student debt. Castro’s plan, while not as broadly-focused as Warren’s, targets poorer borrowers with more specificity by offering partial loan forgiveness for those who receive public assistance benefits such as Supplemental Nutrition Assistance Program, Supplemental Security Income, Temporary Assistance for Needy Families or Medicaid within a certain timeframe.