U.S. Sen. Elizabeth Warren revealed a bold, audacious proposal Monday that would nearly eliminate student loan debt for millions of Americans at the cost of $1.25 trillion over 10 years.
Warren’s plan, which would help middle-class Americans the most, proves she is a warrior for the American who has to bear the heavy burden of paying off their student loans and the interest that comes with it. Her plan does not merely address the decline of middle-class wage growth, it also addresses a more systemic issue: the wealth gap.
The immense cost of her plan to cancel student debt and provide universal free college would be covered by an “Ultra-Millionaire Tax,” which would tax families at 2 percent annually who hold $50 million or more in wealth, according to a Medium article detailing the plan.
While multi-millionaires and billionaires would have to pay more in taxes — something that shouldn’t sound too crazy because it really isn’t — Warren’s plan would help push the United States to be an economy built for and by the average American.
Warren’s plan would reduce debt for more than 95 percent of the almost 45 million Americans who have student loan debt and eliminate debt entirely for more than 75 percent of those 45 million people, the Medium article states.
This will, according to the article, lessen the wealth gap between historically disenfranchised groups — black and Latinx households — and white families. Moreover, Warren argues it would be a highly substantial middle-class stimulus that would spike economic growth, raise home purchases and encourage more small business formation.
“As states have invested less per-student at community colleges and public four-year colleges, the schools themselves have raised tuition and fees to make up the gap,” Warren writes in the Medium article. “And rather than stepping in to hold states accountable, or to pick up more of the tab and keep costs reasonable, the federal government went with a third option: pushing families that can’t afford to pay the outrageous costs of higher education towards taking out loans.”
American borrowers collectively owe $1.5 trillion in student loan debt, according to Forbes. The only category in which people owe more debt is mortgages. However, millennials are struggling to buy homes while also needing to pay off their student loans.
About a third of millennials under age 35 owned a home at the end of last year, according to the U.S. Census Bureau. Compared to previous generations’ homeownership rates, that is eight to nine percentage points less, according to the Urban Institute’s Housing Finance Policy Center.
Warren’s plan represents a necessary, worthwhile investment in the current generation of student loan borrowers. Moreover, making public college free for future generations would help eliminate a cycle of debt that could balloon into the next financial crisis.
Spending $1.25 trillion in federal dollars is no easy feat, but it pales in comparison to, for example, what America spends on defense. Between 9/11 and the end of the 2018 fiscal year, the U.S. spent $5.6 trillion on the costs of war both abroad and domestically, according to report by Brown University.
Moreover, the Congressional Budget Office estimated the recent Republican tax bill, as harmful as it is to everyday Americans, would cost $1.9 trillion over a decade. What’s more important — increasing access to education or spending countless dollars on war and the wealthy?
Warren’s plan is not perfect, but it is a major step in the right direction. There are other issues surrounding higher education, such as the social expectation that one needs a college degree to be successful, that also need to be addressed.
But Democrats are often criticized for failing to seriously address middle-class issues, and it’s clear Warren understands the difficulty many face when they are crippled by student loan debt. Her plan addresses this with great detail.
Hopefully, more Democratic 2020 presidential candidates will come out with such a comprehensive approach to improve higher education in our country. Big ideas are good, but they are far better when they come with a plan.
When I was a child my parents told me to “invest in yourself”. They also told me there was bad debt and good debt. Bad debt was credit card debt accrued through purchases of things you could really live without. Good debt included a mortgage to help you purchase your first home so you could stop paying the mortgage on your landlord’s rental properties and the cost of higher education so you could earn a better living through gainful employment at a better paying job.
With a national average cost of $9,970 per year for in state residents to attend a public college it is still possible for any reasonably frugal person who does not waste their money on the latest fashions and eating out every night to attend college and graduate with minimal if any debt so I fail to see the need for this change in policy.
The change we really need is in our national mindset which thanks in part to propaganda from the mainstream media has resulted in many Americans thinking they are entitled to a tax payer funded higher education so they can afford to look like an MTV star strutting around campus in their new Nike’s!
Expect to hear even crazier ideas from the ridiculously huge field of democratic candidates for POTUS as the stresses of trying to be heard grow even greater … Senator Warren isn’t polling well in MA – she’s a distant third place behind Sanders and Biden … a clear-minded person should quickly be able to see that she doesn’t stand a chance of winning the nomination … perhaps she should take a longer ‘beer break’ and spend some time focusing on the needs of her constituency – cause THAT would be real leadership.
Actually, The People should be upset with Ms Warren as her ‘pie in the sky’ idea can’t possibly get traction – the votes simply AREN’T there … this is an unfair tease, and she’s simply stoking further dissension within the population – it’s WRONG.
Get off the ‘everything should be free’ train … enough already of the ‘somebody owes me something’ express to nowhere – cause this train knows NO destination … learn to be a better consumer and walk away from the stupid ideas that seem like they’re everywhere these days … be like the person who commented above, and practice the differences between ‘good debt’ and ‘bad debt’ … stop coveting everything your neighbor may have, and learn to be happy with what you’ve got … work hard and protect your respective gains – the callouses and scars you picked up along the way are your own personal reminder of the road you traveled … respect that many, if not most, people with great wealth didn’t simply stumble into it; but instead they took great risks, worked long and hard, made plenty of sacrifices along the way, and (perhaps most importantly) should be afforded the opportunity to distribute their wealth as they see fit – NOT as a government dictates.
don’t take out loans for anything other than engineering
don’t take out loans to study something that can be automated
you college libs will all become fiscally conservative once the jadedness sets in