- The Washington Times - Monday, April 22, 2019

Democratic presidential candidate Sen. Elizabeth Warren unveiled Monday a plan to cancel much of America’s student debt and provide tuition-free college, expanding her vision for a massive redistribution of wealth to benefit poor and working families.

Under the plan, Americans with annual incomes up to $100,000 would get an automatic, one-time forgiveness of $50,000 of student debt held by the federal government. Those with higher incomes would get progressively less debt relief.

“Some people will say we can’t afford this plan. That’s nonsense,” said the Massachusetts Democrat, explaining that her proposed ultra-millionaire tax would more than cover the price tag of $1.25 trillion over 10 years.

The tax would slap a 2% annual levy on the 75,000 families with $50 million or more in wealth, raking in an estimated $2.75 trillion over the course of a decade, according to the Warren campaign.

“For decades, we’ve allowed the wealthy to pay less while burying tens of millions of working Americans in education debt. It’s time to make different choices,” Ms. Warren said.

She said that wiping out student debt and making two- and four-year public colleges free would boost the economy and help close the wealth gap between minorities and whites. She called it “an enormous middle-class stimulus.”

On the stump, Ms. Warren recounts how education lifted her from being a janitor’s daughter in Oklahoma to become a teacher, law professor and senator. But students today pay much more than the $50 per semester tuition she paid on a part-time waitress’ salary to launch her journey in higher education.

“Once we’ve cleared out the debt that’s holding down an entire generation of Americans, we must ensure that we never have another student debt crisis again. We can do that by recognizing that a public college education is like a public K-12 education — a basic public good that should be available to everyone for free,” said Ms. Warren.

She also wants the wealth tax to pay for universal childcare and make a down payment on the Green New Deal to fight climate change and “Medicare for All” government-run health care.

Her proposed child care program would serve about 12 million pre-kindergarten children at an estimated cost of $700 billion. After paying for college debt and tuition, she would have nearly $1 trillion left over for other initiatives.

Conservatives and some Democrats warned that Ms. Warren’s soak-the-rich strategy would backfire with dire economic consequences for the U.S.

Former New York Mayor Michael Bloomberg, a billionaire who this year briefly eyed a run for Democratic presidential nomination, said Ms. Warren’s socialist scheme would turn the U.S. into Venezuela.

Several of the nearly 20 Democratic contenders have proposed debt-free college plans. But their attack on the existing debt has largely been limited to plans that would allow borrowers to refinance the loans at lower rates.

Ms. Warren’s plan is the most detailed and aggressive so far in attacking that mountain of debt, which is estimated to total $1.5 trillion owed by nearly 45 million borrowers.

The Warren plan would cancel some of the student debt for more than 95% of borrowers and wipe out the student debt for more than 75% of borrowers, according to the campaign.

The proposal would provide total debt cancellation for about 90% of those with an associates degree or less, but only for about 25% with professional degrees.

Jared Bernstein, an economist at the Center on Budget and Policy Priorities, applauded the plan but said it is vulnerable to criticism for not being more targeted.

“It does help some folks with higher incomes, and I can see where that might generate some complaints,” Mr. Bernstein said. “You could ask why 25% of people with professional degrees need debt cancellation.”

For most Americans, the one-time debt forgiveness would occur automatically based on federal data on borrowers’ household income and debt load.

For households with income between $100,000 and $250,000, the $50,0000 of relief would phase out by $1 for every $3 in income above $100,000. Under that formula, a person with a household income of $130,000 gets $40,000 in debt canceled, while a person with a household income of $160,000 gets $30,000 in debt canceled.

People with household income above $250,000, who are the wealthiest 5% of Americans, would get no student debt relief.

Private student loan debt would also be eligible for cancellation. The federal government would work with borrowers and the holders to provide relief of this debt, according to the plan.

Canceled debt would not be taxed as income.

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