Senator Elizabeth Warren (D., Mass.) rolled out a policy proposal Monday that calls for the use of public funds to pay off hundreds of billions of dollars in outstanding student loan debt.
Under the proposal, the government would pay off some $600 billion in outstanding student loan debt over the next ten years using revenue derived from a so-called “ultra-millionaire tax,” an annual 2 percent tax on wealth over $50 million plus an additional 1 percent on wealth over $1 billion.
“Higher education opened a million doors for me. It’s how the daughter of a janitor in a small town in Oklahoma got to become a teacher, a law school professor, a U.S. Senator, and eventually, a candidate for President of the United States,” Warren wrote in a blog post announcing the policy. “Today, it’s virtually impossible for a young person to find that kind of opportunity.”
The Democratic presidential contender’s plan, which aims to eliminate $1.25 trillion in total student debt over ten years, also calls for a $100 billion increase in federal student aid that does not have to be paid back. It also asks states to partner with the federal government to make public two and four-year universities completely tuition-free.
Debt-relief for lower-income Americans would be prioritized under the plan: Every person with a house-hold income of under $100,000 would be eligible for $50,000 in debt forgiveness, regardless of whether their loans were held in the private or public sector. Relief would then taper off by $1 for every $3 in income above $100,000 before eventually subsiding totally at $250,000.
A group of Brandeis University professors said the economic growth that will result from the proposal “will create additional tax revenue that reduces the overall cost.”
Much of the Democratic primary field has prioritized the cancellation of student debt but Warren is the first to release a policy proposal addressing the issue.