In preparing for the 2020 presidential campaign season, Massachusetts Senator Elizabeth Warren is running on the platform of cancelling American student loan debt as a part of her presidential nomination platform, hoping it could launch her campaign further in the party primaries. Senator Warren and House Majority Whip James Clyburn, a Democratic congressman from South Carolina, proposed legislation to cancel up to $50,000 in student loan debt for approximately 42 million Americans.
Their proposed legislation claimed it would provide “debt relief to 95% of student borrowers, including cancelling student debt entirely for 75% of borrowers.” Senator Warren further states that economists agree it will help close the racial wealth gap “considerably” and could spur wealth growth among Hispanics and black families by $27,000 and $15,700, respectively.
In a press release, Senator Warren said that outstanding student loans total nearly $1.5 trillion, over triple the debt that young Americans had three decades ago. Also about 45 million Americans hold student loan debt. Of those 45 million Americans, the senator’s camp claimed about 7.2 million Americans have defaulted on their loans.
Senator Warren said that is not a waste of money, but it is an investment in America’s future. She said:
“The student debt crisis is real and it’s crushing millions of people — especially people of color. It’s time to decide: Are we going to be a country that only helps the rich and powerful get richer and more powerful, or are we going to be a country that invests in its future?”
As distressing the student loan debt crisis is, the reality is that Senator Warren’s proposal will not resolve the crisis. In fact, her proposal does not attack the root of the problem, which is the burgeoning bureaucratic class in higher education and the federal government’s subsidies of higher education, both of which have spurred the student debt crisis.