Sen. Elizabeth Warren has proposed a sweeping new program for free college and student loan debt cancellation.
In a Medium post published by her presidential campaign Monday morning, Warren proposed canceling up to $50,000 worth of student loan debt for households making less than $100,000, which she estimates would wipe out educational debt entirely for more than 75% of Americans.
Canceled debt would be tax-free, and the plan would be accessible for both publicly- and privately-held student loan debt.
The plan also would be for the federal government to pick up part of the tab for those carrying student loan debt making over $100,000 in household income, but at a lesser rate — the plan would phase out $1 for every $3 above $100,000 in household income. There would be no debt cancellation for households with more than $250,000 in income.
[Opinion: Free college for all is silly because not everyone should go to college]
The Massachusetts Democrat also proposes making college free for all students through direct federal investment. Warren also wants to expand Pell Grants by an additional $100 billion over 10 years to subsidize nontuition costs for students.
Warren estimates the cost of student debt cancellation would cost approximately $640 billion, and universal free college would have a price tag of $1.25 trillion over 10 years. The Democratic presidential hopeful argues that the plan would be paid for by her wealth tax proposal. The tax would apply a 2% rate on the wealth of households with over $50 million in assets, and 3% on those with over $1 billion, paying for the college plan in addition to the universal childcare proposal released earlier in the campaign.
“Some people will say we can’t afford this plan. That’s nonsense. The entire cost of my broad debt cancellation plan and universal free college is more than covered by my Ultra-Millionaire Tax ,” Warren said in her announcement.
Emmanuel Saez and Gabriel Zucman, the University of California, Berkeley professors who assisted Warren in crafting her tax plan estimate that would raise $2.75 trillion over a decade. But economic experts critical of that plan say it may be unconstitutional, and could harm investment as well as bring in less money than expected.
Warren’s sweeping education proposal would also ban for-profit colleges and universities from receiving federal funds, create a $50 billion fund for historically black colleges and universities, require public colleges to complete an annual audit of their practices in enrolling and graduating lower-income and minority students, and prohibit public colleges from considering citizenship or criminal history in admissions.
