Bloomberg rolls out $700B plan for tuition-free college, student debt forgiveness
Democratic presidential candidate Michael Bloomberg unveiled a $700 billion higher education plan Tuesday that calls for tuition-free community college and erasing student loan debt for some low-income borrowers.
The three-time New York City mayor’s plan would dramatically increase federal spending on higher education, including expanding subsidies like Pell grants and SNAP benefits to low-income students, his campaign said in the plan.
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Bloomber's proposal doesn’t go quite as far as some of his Democratic rivals, like progressive senators, Bernie Sanders and Elizabeth Warren who support wide-scale student debt forgiveness and want to eliminate tuition at public, four-year universities.
Instead, Bloomberg would make community colleges tuition-free for all students, a common theme among primary contenders. He went a step further and called for making community colleges “debt free” for low-income students, meaning students would not have to take out loans for costs like books, food and transportation. That option would be available to families that earn less than $30,000 a year on average. The plan would do the same at four-year universities for low-income students.
The Republican-turned-Democrat said he would accomplish that goal by doubling the maximum Pell grant award to $12,960, and helping more students qualify for the need-based financial aid, which does not have to be repaid unlike a traditional student loan. He also vowed to create a federal-state match partnership to boost states’ investments in higher ed.
Borrowers would be allowed to opt-out of the plan if they chose to do so, the campaign said.
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New and existing student loan borrowers would be automatically enrolled in an income-driven repayment program that would cap monthly payments at 5 percent of a borrower’s discretionary income, down from the current 10 percent under many existing income-based repayment plans. After 20 years of “reasonable repayment” the government would forgive up to $57,000, the maximum amount undergraduates can borrow in federal loans, tax-free.
Another tenet of Bloomberg’s plan is to make college “fair" by ending admissions that favor “privilege and family connections over merit.”
During the next decade, the plan would cost an estimated $700 billion, his campaign said. The higher education plan would be funded by his proposal to raise taxes on the wealthy. The 78-year-old billionaire has called for reversing President Trump’s 2017 Tax Cuts and Jobs Act, as well as a 5 percent tax on incomes over $5 million a year.
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