Bernie Sanders wants Wall Street to pay off the US' $1.6 trillion student loan debt. Even Democrats are likely to push back on the plan
Hollis Johnson/Business Insider
- Sen. Bernie Sanders introduced Senate legislation on Monday to eliminate the $1.6 trillion in student loan debt held in the United States and make all of public higher education tuition-free, carving new progressive territory in a competitive Democratic presidential primary.
- The bill would have the federal government pay to erase virtually all the student debt held by an estimated 45 million Americans with a new tax on Wall Street transactions. The Sanders campaign says the tax would generate $2 trillion over ten years to cover its cost.
- It's part of a broader package from Sanders that would also make public universities, trade schools and community colleges tuition-free.
- But the Sanders plan is likely to face objections from some centrist Democrats concerned of the bill benefitting wealthier individuals and conservatives over its high cost.
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Presidential candidate Sen. Bernie Sanders proposed on Monday to eliminate the $1.6 trillion in student loan debt held in the United States and make all of public higher education tuition-free, carving out new territory in a competitive Democratic presidential primary.
Introduced into the Senate, the bill would have the federal government pay to erase virtually all the student debt held by an estimated 45 million Americans with a new tax on Wall Street transactions. The Sanders campaign says the tax would generate $2 trillion over ten years to cover its cost, an expense likely to trigger opposition from moderate Democrats.
At a press conference unveiling the proposal, Sanders said: "We will make a full and complete education a human right in America to which all of our people are entitled."
It's part of a broader package from Sanders that would also make public universities, trade schools and community colleges tuition-free. Democratic Rep. Ilhan Omar and Rep. Pramila Jayapal are introducing a companion bill in the House. Both are progressive lawmakers who have championed tuition-free college during their time in Congress.
Federal data shows that the share of student debt has doubled over the last decade from $700 billion to $1.6 trillion today, overtaking credit cards and car loans as the biggest share of debt Americans hold. The average college student graduates with at least $30,000 in debt, CNBC reports.
The Vermont senator's plan to erase student debt is one of the most ambitious proposals yet from the sprawling Democratic presidential primary field, put forward only two days before the first primary debates in Miami. And it aligns with his campaign's message to address the economic anxieties of Americans and boost the middle class. In an interview with CBS's Face the Nation that aired yesterday, Sanders described student debt as "an incredible burden on an entire generation of people."
Two other Democratic candidates have proposed plans for a range of student debt forgiveness. Sen. Elizabeth Warren put forward a plan that would combine tuition-free college and up to $50,000 in debt forgiveness with a price tag of $640 billion, also centered with a new tax on Wall Street. Former housing secretary Julian Castro's plan would offer limited debt forgiveness for people receiving public assistance.
Colleen Campbell, the director of Postsecondary Education at the Center for American Progress, a center-left think tank, told INSIDER the Sanders proposal brings "a left flank" on an issue that's increasingly important to the Democratic electorate - many of whom are young millennials saddled with student loan debt.
"By proposing a universal plan, you essentially end up in a situation where there aren't false positives of people who might have a higher income but really be struggling," Campbell says. "But I think there's merits to consider that apply to universal plans that don't necessarily apply to ones that are more means-tested."
But the Sanders plan is likely to face objections from some centrist Democrats concerned that the bill benefits wealthy individuals and from conservatives over its high cost.
Brian Riedl, a senior fellow at the Manhattan Institute for Policy Research, a conservative think tank, criticized the Sanders campaign's number-crunching, tweeting that the cost of the plan could be $3 trillion, saying, "Even Sanders rosy financial tax estimate is not close to enough."
Sara Goldrick-Rab, a professor at Temple University and an expert in higher education financing, told the Washington Post that the proposal gave her some reservations. "There's a piece of me that has seen how widespread the pain is, including among people you might say are financially fine. But there's a piece of me that knows what the pot looks like, and says, 'That's not the best use of the money,'" she said.
During his last presidential campaign in 2016, Sanders campaigned for tuition-free college regardless of income.