As a public advocate, as a senator, and now as a presidential candidate, Elizabeth Warren's primary focus has been leveling the playing field for all Americans. On Monday, she rolled out another visionary policy proposal to do just that: a comprehensive student debt cancellation and universal free public college plan.
Warren's first step in dealing with what she calls a higher education crisis, "a huge student loan debt burden that's crushing millions of families and acting as an anchor on our economy," is a plan to cancel up to $50,000 in student debt owed by 42 million Americans, 95 percent of the nearly 45 million who hold debt. People with household income below $100,000 would be eligible for $50,000 in debt cancellation; Warren’s proposal creates a sliding scale for eligibility for people with up to $250,000 in annual income, with debt phased out at a rate of $1 for every $3 in income above $100,000, so that someone making $130,000 a year would get $40,000, and so on. It would be available for both public and private school debt, and the canceled debt would not be taxed as income.
"Once we've cleared out the debt that’s holding down an entire generation of Americans," Warren writes, "we must ensure that we never have another student debt crisis again. […] We need to fundamentally change the broken system that created the crisis in the first place." That means making free public education available to every Americans for primary and secondary school as well as for two- and four-year public college. The federal government and states would partner to split tuition and fees and would expand eligibility and funding for Pell grants to cover non-tuition costs, "to make sure lower-income and middle-class students have a better chance of graduating without debt."
Warren's plan focuses on "fixing our higher education system so it better serves lower-income families and communities of color." That includes creating a $50 billion minimum fund for historically black colleges and universities and minority-serving institutions to "ensure that spending per-student at those schools is comparable to colleges in the area." It would provide addition federal funding to states that show "substantial improvement in enrollment and graduation rates for lower-income students and students of color." It would end federal funding, including military benefits and federal student loans, going to for-profit colleges that have disproportionately preyed on people of color. It would require public colleges to complete an annual audit examining enrollment and graduation rates for lower-income students and students of color, and would ban public colleges from "considering citizenship status or criminal history in admissions decisions."
The plan would carry a one-time cost to the government of $640 billion, and would cost roughly $1.25 trillion over 10 years, paid for by Warren's Ultra-Millionaire Tax on the wealthiest 75,000 families with fortunes of $50 million or more. An economic analysis of her plan from Brandeis University finds that not only would it erase debt for millions, but it would also likely boost the economy through "consumer-driven economic stimulus, improved credit scores, greater home-buying rates and housing stability, higher college completion rates, and greater business formation."
In a New York Times interview, Warren said "This touches people’s lives. […] This is a chance to talk about what’s broken and how we fix it. This is the American dream." Asked about whether she could keep up her "frenzied pace" of comprehensive policy proposals, Warren laughed and said, "I love this."