Vermont Sen. Bernie Sanders introduced a bill Monday to eliminate all $1.6 trillion of student debt in the United States, The Washington Post reports.
Sanders and Reps. Ilhan Omar and Pramila Jayapal introduced bills this week in both chambers of Congress to impose a tax on Wall Street that Sanders claims will raise $2 trillion over 10 years to pay off all of the student debt held by some 45 million Americans.
The bill includes all private and graduate school debt and would make public universities, community colleges, and trade schools tuition-free.
The proposal comes after Massachusetts Sen. Elizabeth Warren proposed a $640 billion debt forgiveness plan.
Student debt has spiraled into a massive problem far greater than that experienced by previous generations. Two decades ago, the combined student loan debt in the United States stood at just $90 billion. Today it is up to $1.6 trillion.
“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 Monday.
Sanders would pay for debt plan with transaction tax:
The bill would pay for the debt elimination by imposing a 0.5% tax on stock transactions and a 0.1% tax on bonds.
The left-leaning Century Foundation said the plan would curb Wall Street speculation while helping cut down income inequality while conservatives say it could hamper economic growth and investment.
Should better-off students get government help?
A key sticking issue with the debt elimination plan is that much of the money would go to families that aren’t struggling while providing only limited help to those who need it most.
“Of all problems requiring a $3 trillion federal expenditure, the college costs of middle- and upper-class college graduates seem lower-priority,” Brian Riedl, an analyst at the libertarian-leaning Manhattan Institute, told The Post.
“The top 40 percent of earners would receive about two-thirds of the benefits from Warren’s plan,” added former Obama Treasury official Adam Looney. “Warren has proposed forgiving up to $50,000 in student debt for those earning under $100,000, or about 42 million people,” The Post reported.
“There’s a piece of me that has seen how widespread the pain is, including among people you might say are financially fine,” Temple University professor Sara Goldrick-Rab told the outlet. “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.’ ”
