Sen. Bernie Sanders’ free college proposal just got a whole lot bigger. Now, the Vermont senator wants to cancel all student loan debt. That’s right, all of it.
Monday, Sanders proposed eliminating all $1.6 trillion of student loan debt held by 45 million Americans in a move that greatly escalates the Democratic policy battle, as The Washington Post reports.
Currently vying for a presidential primary win, Sanders announced the policy stance just two days before the first Democratic debate in Miami. The proposal is the most ambitious debt burden relief plan in the Democratic primary so far, plunging into uncharted territory.
Some say the move was an attempt to distinguish himself from other presidential candidates, including Sen. Elizabeth Warren, who has risen in the polls and is locked in competition with Sanders for the No. 2 spot behind former vice president Joe Biden.
The proposal would wipe clean every cent of student debt, including private and graduate school debt, while making public universities, community colleges and trade schools free. It also subsidizes the tuition costs for low-income students at private colleges that serve underrepresented communities.
But how will he pay for it? Sanders is proposing a speculation tax on Wall Street that he says will raise more than $2 trillion over a decade, though some tax experts offer up lower estimates.
Sanders is looking at a new tax 0.5% tax on stock transaction and 0.1% tax on bonds. Century Foundation, a left-leaning think tank, says the move would reduce income inequality, but conservatives say it would hinder economic growth and investment.
Representative Ilhan Omar, who joined Sanders for the announcement, will introduce the legislation in the House. Representative Pramila Jayapal also joined Sanders. Jayapal is the co-chair of the Congressional Progressive Caucus and has pushed to make public universities tuition-free. Representative Alexandria Ocasio-Cortez is also backing the proposal.
During his 2016 presidential run, Sanders helped popularize calls for tuition-free college, but he hasn’t tackled solutions for recent graduates saddled with debt until now.
Since 2016, many Democrats have been pushing for more aggressive policy. Warren, who’s also heading to the Democratic primaries, for example, proposed $640 billion in student debt forgiveness.
But these proposals have been met with fierce criticism from some more moderate Democrats who say the policies would give taxpayer subsidies to educated Americans who earn more already. Intense debates have been ripping through liberal circles as Democrats disagree over whether wiping all student debt without any eligibility limitations based on income offers too much help to higher-income families and not enough to lower-income families.
Warren unveiled a similar debt relief proposal that has income eligibility levels that determine how much debt relief someone will get, which she said was done to reduce income gaps and the racial-wealth divide. Sanders’s plan nixes all eligibility restraints.
Others say this generation has made decisions with student debt in mind, causing some to choose public universities over private schools to avoid amassing heavier debt. Forgiving all student debt, critics say, may be unfair to these students who have already paid tuition at public universities and made the public over private decision because of financial concerns.
On the other hand, advocates point the the heavy economic toll the country’s soaring student debt burden has taken, especially on millennials.
“In a generation hard hit by the Wall Street crash of 2008, it 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 in his announcement of the plan.
Advocates also say the plan would stimulate economic growth by allowing millennials once heaped with debt to buy homes and improve their credit.