Coverage: Bernie Sanders to propose plan for canceling $1.6 trillion in student debt

Senator Bernie Sanders will later today propose legislation that could see $1.6 trillion in student debt erased from the board.

Ryan Nobles and Gregory Krieg had the news for CNN:

Sen. Bernie Sanders is set to stake out uncharted territory in the Democratic presidential primary, offering up a plan to completely eliminate the student loan debt of every American.

On Monday, Sanders will submit legislation that cancels $1.6 trillion of student loan undergraduate and graduate debt for approximately 45 million people. His ambitious plan has no eligibility limitations and would be paid for with a new tax on Wall Street speculation.

The proposal goes further than the plan already unveiled by his Democratic primary rival Sen. Elizabeth Warren. Warren’s debt relief package was subject to income eligibility levels to determine how much relief the average person would receive — parameters that Warren said were aimed at closing the racial wealth gap. Under the Sanders plan, if you have student debt of any kind it would be canceled the second the legislation is signed into law.

Sanders will announce the legislation alongside Minnesota Rep. Ilhan Omar and Washington Rep. Pramila Jayapal, co-chair of the Congressional Progressive Caucus.

Amanda Terkel shared some details for Huffington Post:

The Sanders bill eliminates all student debt, whereas Warren’s plan ― while still substantial ― covers $1.25 trillion for 42 million people. The difference is that Warren’s plan has caps.

Warren’s proposal forgives $50,000 in student loan debt for every person with a household income of $100,000. People between $100,000 and $250,000 in household income would have a portion of their debt forgiven, and people above that amount would get no cancellation.

Sanders’ proposal to forgive all student debt, versus Warren’s proposal to cap the amount and base levels on income, highlights a key debate among supporters of debt forgiveness.

Black students are disproportionately affected by student debt compared to white students. The Brookings Institution found that four years after graduation, “black graduates have nearly $25,000 more student loan debt than white graduates.” Black students are far more likely to attend for-profit graduate schools ― which are often low quality and pile students with debt ― and they take on significantly more financial risk in going to graduate school.

Marshall Steinbaum at the Roosevelt Institute found that the racial wealth gap of white to black households was 12:1 in 2016, whereas it would be just 5:1 in the absence of student debt.

Supporters of the Sanders approach argue that data like these are reasons why all debt should be wiped out. Even people who currently may make a lot of money could also use financial assistance.

Vox’s Tara Golshan delved into the costs of the proposal:

The proposal would cost $2.2 trillion over 10 years, which Sanders says would be paid for with his Wall Street tax. Sanders proposed a Wall Street speculation tax in 2016, which would raise small levies on buying and selling stocks, bonds, and derivatives. It’s a proposal that many experts estimate could raise hundreds of billions of dollars annually. Sanders’s office cited progressive economist Robert Pollin’s projection that the tax would bring in $2.4 trillion in revenues over 10 years.

Free college is one of Sanders’s signature issues. He’s called the prohibitive costs of higher education a “national disgrace.” It was one of many proposals that distinguished Sanders in the 2016 presidential primary against Hillary Clinton, who argued the government shouldn’t subsidize education for the wealthiest Americans. Three years later, it’s clear that Sanders’s vision is ascendant in the Democratic Party.

“We believe definitionally that if you are the upper elite, that you by definition would not have had to take out student loans,” Keane Bhatt, Sanders’s spokesperson, told Vox. “There is something to be said about simple, intelligible poicies that build broad constituencies.”