Sen. Elizabeth Warren (D-MA) is rolling out a comprehensive higher-education plan that includes a broad proposal to cancel student-loan debt.
The plan, which would cancel $50,000 in student-loan debt for every person with a household income under $100,000, is the latest in the presidential candidate’s list of ambitious policy proposals, including breaking up large tech companies, a new corporate profits tax and universal child-care coverage.
According to a Medium post detailing the policy, the debt cancellation would also apply for every person with a household income between $100,000 and $250,000, with the cancellation amount declining a dollar for every three dollars in income above $100,000, so that a person earning $130,000 would have $40,000 in cancellation. It would not cancel debts for people earning more than $250,000.
The cancellation would take place in most cases, through data the federal government already has on income and student-loan debts. The canceled debt wouldn’t be taxed as income, according to her plan.
“The enormous student debt burden weighing down our economy isn’t the result of laziness or irresponsibility,” writes Warren, whose first bill as a senator sought to provide relief to student borrowers. “It’s the result of a government that has consistently put the interests of the wealthy and well-connected over the interests of working families.”
An analysis of the plan from experts at Brandeis University estimates that Warren’s policy would provide total debt cancellation to more than 75 percent of Americans with student-loan debt and some form of relief to more than 95 percent.
The estimated cost for the debt cancellation and the universal free college program is around $1.25 trillion over 10 years, a figure Warren wants to pay for with her ultra-millionaire tax, which would apply a 2 percent annual tax on households with $50 million or more.
The Massachusetts Democrat also wants to address how the higher-education system can better serve low-income families and students of color, with a planned investment of an additional $100 billion in Pell Grants, a $50 billion fund for Historically Black Colleges and Universities (HBCUs) and Minority- Serving Institutions (MSIs), and “after an appropriate transition period,” a ban on for-profit colleges receiving federal dollars. Warren suggests instituting an annual audit for public colleges “that identifies issues creating shortfalls in enrollment and graduation rates for lower-income students and students of color,” and prohibiting them from considering citizenship status or criminal history in their decisions on admissions.
“We got into this crisis because state governments and the federal government decided that instead of treating higher education like our public school system—free and accessible to all Americans—they’d rather cut taxes for billionaires and giant corporations and offload the cost of higher education onto students and their families,” Warren writes. “The student debt crisis is the direct result of this failed experiment.”