Sen. Bernie Sanders on Monday proposed eliminating all of the nearly $1.6 trillion in outstanding student loan debt owed by Americans, raising the stakes on an issue that has increasingly animated the progressive base of the Democratic party.
Sanders is the latest 2020 presidential contender to propose a one-time cancellation program that would forgive large portions of student loan debt, which is owed by some 45 million Americans. His plan follows one released earlier this year by Sen. Elizabeth Warren, (D-Mass.), who called for forgiving $640 billion of student loan debt.
Sanders’ call for completely eliminating existing student loan debt is sure to rekindle divisions among progressives and Democratic primary voters more broadly over whether sweeping new government benefits should be available to all — or targeted to low- and middle-income families.
But Sanders pushed back on that potential divide during a press conference outside of the Senate on Monday morning, saying he believes education is a right to everyone, regardless of income.
“The overwhelming majority of the people who are going to benefit from this legislation are working-class people,” Sanders said, surrounded by progressive lawmakers, including Reps. Pramila Jayapal (D-Wash.), Ilhan Omar (D-Minn.) and Alexandria Ocasio-Cortez (D-N.Y.), who are filing a companion bill to Sanders’ proposal in the House.
Sanders said he believes in “universality,” but that he aims to make sure his proposal doesn’t benefit the wealthy by demanding “that the wealthy and large corporations start paying their fair share in taxes”
“And that means that if Donald Trump wants to send his grandchildren to public school, he has the right to do that,” he said. “What we are saying today is public colleges and universities should be tuition-free and debt-free for all Americans.”
The lawmakers pitched the effort as a “bailout” for millennials and the working class, funded by Wall Street.
“The American people bailed out Wall Street. It’s time for Wall Street to bail out the American people,” Omar said, echoing Sanders’ comments from a campaign event Sunday at Clinton College in Rock Hill, S.C., where he argued that “if we could bail out Wall Street, we sure as hell can reduce student debt in this country.”
The key difference between Sanders and Warren is that Warren seeks to limit loan forgiveness for wealthier student loan borrowers, rather than extending the relief to all. Her proposal would forgive $50,000 of debt for borrowers earning less than $100,000, with proportionally less debt relief for those earning up to $250,000 and no benefit for borrowers beyond that income level. Warren said earlier this month that she and House Majority Whip Jim Clyburn would introduce bicameral legislation in the "coming weeks" on debt relief.
The proposal to cancel all existing student loan debt is one component of Sanders’ overall $2.2 trillion higher education plan, which includes eliminating tuition at public colleges and some private schools that serve large swaths of minority students.
Sanders would pay for his higher education plan by imposing a new tax on Wall Street transactions, including stock trades, bonds and derivatives. His campaign said that taxes would generate more than $2.4 trillion over the next decade, enough to cover the $2.2 trillion higher education plan.
The Sanders legislation would also cap the interest rate on all new federal student loans at 1.88 percent. The current rate on new loans ranges from about 4.5 percent for undergraduates to about 7 percent for Parent PLUS and some graduate student loans.
The bill would also triple funding on Federal Work-Study and double money for federal programs that help low-income students enroll in and graduate from college.
Sanders previously called, during the 2016 presidential campaign, for eliminating tuition at public colleges and universities for all students. He sparred over that issue with Hillary Clinton, who attacked his plan for subsidizing wealthy families who can already afford to pay for college. Sanders ultimately backed a compromise with Clinton ahead of the 2016 Democratic convention that called for limiting free public college tuition to families earning less than $125,000.
Sanders' latest plan would go even further in eliminating tuition at public colleges and universities for all students. It would provide new federal funding to help states eliminate costs for low-income students beyond tuition, for instance. And it also aims to eliminate tuition for low-income students at some 200 private institutions that serve large numbers of minority students, including historically black colleges and universities.
Critics of the debt forgiveness on both sides of the aisle have said that it would provide large benefits to higher-income families who have student loan debt from expensive graduate degrees.
Other Democratic candidates, such as Mayor Pete Buttigieg, have positioned themselves as more moderate on the issue, saying that canceling student loan debt unfairly benefits those who go to college over those who don’t. Sen. Amy Klobuchar (D-Minn.) has rejected the idea of free tuition at four-year colleges as unrealistic and too expensive, though she supports free community college.
Benjamin Wermund contributed to this report.
Article originally published on POLITICO Magazine
