Sen. Elizabeth Warren Proposes Free College & Mass Student Debt Cancellation

, Alex Nitzberg, Leave a comment

In the midst of a crowded Democrat primary, presidential candidate Sen. Elizabeth Warren (D-MA) released a policy proposal this week calling for large-scale student debt cancellation and free college tuition at all public universities.

Her plan prescribes $50,000 of debt cancellation for those with a household income of less than $100,000, with decreasing debt cancellation amounts for higher earners and zero debt cancellation for people with household income of over a quarter million dollars.

The proposal specifies that this debt absolution is not limited solely to government loans, but “Private student loan debt is also eligible for cancellation, and the federal government will work with borrowers and the holders of this debt to provide relief.”

Sen. Warren also calls for completely free college at public institutions—including both tuition and fees—describing college as “a basic need that should be available for free to everyone who wants to go.” Her proposal states:

Like K-12 education, college is a basic need that should be available for free to everyone who wants to go. That’s why I’m proposing a historic new federal investment in public higher education that will eliminate the cost of tuition and fees at every public two-year and four-year college in America. The federal government will partner with states to split the costs of tuition and fees and ensure that states maintain their current levels of funding on need-based financial aid and academic instruction.

And she asserts the need for even more money to cover other college-related costs besides tuition, proposing a one hundred billion dollar increase in Pell Grants over the next decade:

In addition to the existing federal higher education funding that can be redirected to cover non-tuition expenses, we should invest an additional $100 billion over the next ten years in Pell Grants — and expand who is eligible for a Grant — to make sure lower-income and middle-class students have a better chance of graduating without debt.

Grants like the Federal Pell Grant are “free money” given to students that do not require repayment as a loan does, except in specific cases. Pell Grant appropriations were about $29.92 billion dollars for fiscal year 2019, according to the Department of Education.

Sen. Warren also includes plans in her proposal to:

  • “Create a fund for Historically Black Colleges and Universities (HBCUs) and Minority-Serving Institutions (MSIs). The fund will have a minimum of $50 billion, but the Secretary of Education will have the authority to increase the amount of money in the fund as needed to ensure that spending per-student at those schools is comparable to colleges in the area.”
  • “Make additional federal funding available to states that demonstrate substantial improvement in enrollment and graduation rates for lower-income students and students of color.”
  • “After an appropriate transition period, ban for-profit colleges from receiving any federal dollars (including military benefits and federal student loans), so they can no longer use taxpayer dollars to enrich themselves while targeting lower-income students, service members, and students of color and leaving them saddled with debt.”
  • “Require public colleges to complete an annual audit that identifies issues creating shortfalls in enrollment and graduation rates for lower-income students and students of color and that proposes steps to improve those rates.”
  • “Prohibit public colleges from considering citizenship status or criminal history in admissions decisions.”

While Sen. Warren states that experts say her proposal will generate economic benefits, she says that her “Ultra-Millionare Tax” would supply the funds needed for the costs:

Experts estimate my debt cancellation plan creates a one-time cost to the government of $640 billion. The Universal Free College program brings the total cost of the program to roughly $1.25 trillion over ten years.

The actual costs of these new ideas are likely to be even less than that. Experts find that my debt cancellation plan will create an economic stimulus, and study after study shows that investments in higher education provide huge returns for every dollar. But even setting aside the eventual returns to these investments, we can fully cover the cost of these ideas with revenue from my Ultra-Millionaire Tax on the wealthiest 75,000 families in the country — those with fortunes of $50 million or more.

The Massachusetts Senator also indicated in a tweet that her proposal includes public technical institutions as well: “My plan for the cancellation of student loan debt applies to public technical schools, too. Wherever you pursue an education, you should be able to graduate without getting crushed by piles of debt,” the tweet reads.