On Thursday, June 27, Sen. Bernie Sanders of Vermont will join his fellow 2020 Democratic candidates for the first round of presidential debates. However, the senator has unveiled a new proposal ahead of the event, and it could be a game changer for graduates facing thousands of dollars in student debt. So, what's in Bernie Sanders' student debt cancellation program? Here's the rundown.
On Monday, June 24, Sanders released the College For All Act, proposed legislation that would completely cancel nearly $1.6 trillion of student loan debt impacting 45 million borrowers within the United States. According to CNN, Sanders' plan would have no eligibility restrictions, meaning student debt would be cancelled for all graduates regardless of socioeconomic status or household income, and the money would come from a speculation tax Sanders plans to implement on Wall Street.
The plan would also make two and four year public colleges tuition-free, cap interest rates on student debt, increase work-study programs, and support other educational costs such as buying textbooks for low-income students, per Vox.
Sanders reportedly drafted the plan alongside Rep. Ilhan Omar of Minnesota and Rep. Pramila Jayapal of Washington, who is also the co-chair of the Congressional Progressive Caucus. Sanders addressed the United States' student debt crisis while speaking at a South Carolina rally on Saturday, June 22. He said,
We are going to forgive student debt in this country. We have for the first time in the modern history of this country a younger generation that if we don't change it — and we intend to change it — will have a lower standard of living than their parents, more in debt, lower wages than their parents, unable to buy the house that they desire.
Sanders himself tweeted about the plan on June 24.
Sanders' student debt proposal follows another plan introduced by Sen. Elizabeth Warren of Massachusetts, who is also running for president in 2020. However, they're different in a number of ways. On April 22, Warren penned a Medium post which detailed a student debt proposal that would cancel up to $50,000 of student debt for households with incomes of under $100,000. According to Warren, the proposal would impact over 42 million American households, canceling a majority of debt for 95% of households and completely eliminating debt for 75% of Americans.
The difference between Sanders and Warren's proposals is that while Sanders' plan would cancel federal student debt for all Americans, Warren's plan focuses on eliminating the wealth gap by assisting lower-income households with student loans. In addition, Warren also mentioned in the post that she aims to push for free college tuition at two and four year public universities in an effort to make sure education is accessible to all Americans. "Once we’ve cleared out the debt that’s holding down an entire generation of Americans, we must ensure that we never have another student debt crisis again," Warren wrote.
The student debt crisis has reached record-breaking numbers over recent years, and the stress of managing student loans can severely impact college students and graduates. On May 22, Magnify Money found that nearly 40% of individuals faced with loans have considered dropping out of college in order to avoid accruing more debt. Of those students, over half had more than $20,000 in student loans.
No matter who introduces the proposal, the student debt crisis is an issue that needs to be addressed. We'll just have to wait and see if change is on the horizon.