WHAT YOU NEED TO KNOW:
- Sen. Bernie Sanders of Vermont announced on Monday that he plans to erase the $1.6 trillion outstanding student debt of Americans.
- The bill will free all 45 million Americans from their student debt and be paid for with a new tax on Wall Street transactions, according to CNBC.
- Two- and four-year public colleges and universities would be tuition- and debt-free as proposed by the legislation.
Independent Sen. Bernie Sanders announced on Monday about a plan to eradicate the nation’s $1.6 trillion outstanding student loan debt, intensifying the higher education policy debate in the 2020 Democratic presidential primary.
The presidential hopeful’s legislation — called “The College for All Act” — will free all 45 million Americans from their student debt and be paid for with a new tax on Wall Street transactions.
In the U.S., outstanding education debt has passed credit card and auto debt. Currently, the average college graduate leaves school with $30,000 student debt — a climb from $10,000 in the 1990s, and 28% of student loan borrowers are in delinquency or default.
Sen Sander’s plan would make two- and four-year public colleges and universities tuition- and debt-free. Trade schools and apprenticeship programs would be tuition-free, as well, according to CNBC.
“This is truly a revolutionary proposal. In a generation hard hit by the Wall Street crash of 2008, it forgives all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the ‘crime’ of getting a college education,” Sanders told The Washington Post.
Sanders is introducing the bill with Rep. Ilhan Omar, D-Minn., and Rep. Pramila Jayapal, D-Wash., the co-chairwomen of the Congressional Progressive Caucus.
According to the senator’s office, the $2.2 trillion plan would be paid for by a new tax on financial transactions, including a 0.5 percent tax on stock transactions and a 0.1 percent tax on bonds. That levy would raise up to $2.4 trillion over the next ten years.
Proponents say the plan addresses a debt burden that has grown over the last decade and has stunted the financial lives of a generation of Americans.
CNBC reports that recent research has found forgiving student loan debt would increase Gross Domestic Product, add over one million jobs and raise small business formation and homeownership rates.