It’s an interesting idea, although one fraught with moral hazard.
Elizabeth Warren is working hard to make herself the most progressive candidate in the Democratic field, outdoing even Bernie Sanders.
CNN:
Sen. Elizabeth Warren on Monday proposed eliminating the student loan debts of tens of millions of Americans and making all public colleges tuition-free, staking out an ambitious stance on one of the central policy debates of the 2020 Democratic primary.
Student debt and college affordability have become a key dividing line in the Democratic race, between more progressive candidates who favor sweeping new tuition and student-loan benefits and others who support more incremental adjustments to the way Americans pay for education.
Warren’s new plan would forgive $50,000 in student loans for Americans in households earning less than $100,000 a year. According to analysis provided by her campaign, that would provide immediate relief to more than 95% of the 45 million Americans with student debt. The Massachusetts Democrat and 2020 contender is also calling for a drastic increase in federal spending on higher education that would make tuition and fees free for all students at two- and four-year public colleges and expand grants for lower-income and minority students to cover costs like housing, food, books and child care.
The campaign estimates that the plan would cost $1.25 trillion over 10 years.
The revenue from Warren’s wealth tax proposal — a 2% tax on wealth above $50 million and a 3% tax on wealth above $1 billion — would pay for her newest proposal, her campaign said. According to details shared by her campaign, the massive debt cancellation and free college plan additionally asks states to chip in to cover the cost of tuition and fees. Warren has also said her universal child care proposal would be paid for by her wealth tax.
[…]
Warren — a co-sponsor of Sen. Bernie Sanders’ 2017 legislation that would make four-year public colleges tuition-free for some students — said her new plan is “bigger” and “goes further” than Sanders’, who is also vying for the Democratic nomination.
“It covers more and it addresses both the access question of going to college and the problem of the debt burden for our students,” she said.
[…]
There is broad support among the Democratic presidential candidates for making college more affordable, though they differ on how to do so. Sens. Cory Booker, Kamala Harris, and Kirsten Gillibrand — along with Warren — are all co-sponsors of Sen. Brian Schatz’s Debt-Free College Act. It would establish a matching grant to states that commit to helping students pay for the full cost of attendance without taking out loans.
But other candidates — including Sen. Amy Klobuchar and South Bend, Indiana, Mayor Pete Buttigieg — have stopped short of embracing a free-college platform.
“I am not for free four-year college for all, no,” Klobuchar said at a CNN town hall in February, though she noted she would support making community colleges free.
Buttigieg has argued that free college would result in those who earn less because they didn’t go to college subsidizing those who did go to college and tend to enter higher-paying careers. But he has called for expanding Pell grants and incentivizing states to invest more money in higher education. CNN, “Elizabeth Warren releases sweeping student debt cancellation and free college plan”
Buttigieg isn’t the only one raising fairness issues. Philip Klein, the executive editor of the Washington Examiner, claims that the program would amount to “a slap in the face to all those who struggled to pay off their loans.”
The plan would be tremendously unfair to those who have been struggling for years to pay off their student loans.
It’s true, some people may simply earn too little to make a dent in student loans no matter how hard they work and no matter how much they reduce their expenses. But that doesn’t tell the whole story.
There are those who may have taken higher-paying jobs they didn’t necessarily want to pay off loans. And there are those who have cut expenses to the bare bones to pay off loans while watching their friends with similar salaries eat out and travel and de-prioritize paying off loans.
