Will student debt prove to be the deciding issue among the young center-left base during the Democratic primary?
Senator Bernie Sanders (I-Vt)., one of the leading candidates for the Democratic nomination in the 2020 presidential race, is proposing a plan to eliminate the entire $1.6 trillion in outstanding student debt held by 45 million Americans.
The Sanders plan would include debt forgiveness for students who attended private and graduate schools, combined with a proposal to offer free (i.e., taxpayer-funded) tuition to all Americans at public universities, community colleges, and trade schools.
Sanders’ calls for student debt forgiveness resulted in the hashtag #CancelStudentDebt trending on Twitter early Monday.
The Vermont Senator, a self-proclaimed Democratic Socialist, will be joined in announcing the specifics of his plan by Representative Ilhan Omar (D-Minn) and Representative Pramila Jayapal (D-WA).
Omar will introduce legislation in the House to erase all student debt in the country, while Jayapal, who is co-chairwoman of the Congressional Progressive Caucus, is an advocate for free tuition at public universities.
According to Sanders, the plan would be paid for with a tax on Wall Street that he claims would raise over $2 trillion in 10 years. Specifically, the plan would include a 0.5-percent tax on stock transactions and a 0.1-percent tax on bonds — measures Sanders argues would rein in Wall Street speculation and reduce income inequality.
“In a generation hard hit by the Wall Street crash of 2008, [the plan] 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.
The progressive lawmaker made “free” college one of the central tenets of his 2016 presidential campaign. His push for student-loan forgiveness comes as other Democratic 2020 hopefuls, including Senator Elizabeth Warren (D-Mass.), embrace similar plans.
Warren, who has overtaken Sanders as the runner-up behind former Vice President Joe Biden in some Democratic primary polls, has adopted a program that would clear the debt for over 75 percent of borrowers, forgiving up to $50,000 for those earning $100,000.
Former Obama Housing and Urban Development Secretary Julian Castro has also released a student-debt forgiveness plan, under which borrowers would not have to repay their loans so long as their income remained under 250 percent of the federal poverty level — approximately $64,000 for a family of four.
Sanders’ plan has received criticism from some center-left organizations, which say that eliminating college debt would disproportionately benefit higher-income individuals and families.
Adam Looney, a former Treasury official under President Obama who now works at the left-wing Brookings Institution, says that the Warren plan would give two-thirds of benefits to the top 40 percent of earners — a figure that would be higher under the universal forgiveness of the Sanders plan.
Brian Riedl of the libertarian Manhattan Institute expressed similar concerns. “The cost will march toward $3 trillion and benefit a lot of wealthy families and future high-earners,” he said. “Of all problems requiring a $3 trillion federal expenditure, the college costs of middle- and upper-class college graduates seem lower-priority.”
But Marshall Steinbaum, a former researcher at the Roosevelt Institute, countered that higher taxes on wealthier Americans would ultimately balance out the disparity. And Representative Omar maintained that the Sanders plan would “unleash billions of dollars in economic growth.”
In addition to free college and student-loan forgiveness, Sanders and other progressive candidates are backing several other expensive federal projects, including Medicare for All and the Green New Deal.
American voters will have to determine whether they can afford so many “free” programs.
Photo: AP Images
Luis Miguel is a marketer and writer whose journalistic endeavors shed light on the Deep State, the immigration crisis, and the enemies of freedom. Follow his exploits on Facebook, Twitter, and at luisantoniomiguel.com.