As part of her presidential campaign, Senator Elizabeth Warren (D-Mass.) has proposed a $1.25 trillion college-affordability plan that would cancel most student loan debt, make two- and four-year public colleges tuition-free, and target aid to minority-serving institutions. While noting that “Warren is not the first politician to call for any of these policies specifically,” The Atlantic says her plan’s scope and specificity is “setting the bar for the most radical reimagining of higher education among the Democrats in the 2020 race.”
Canceling student debt
Under Warren’s plan, borrowers with a household income of less than $100,000 would see up to $50,000 in student loan debt forgiven. The amount forgiven would then shrink by $1 for every $3 earned annually above the $100,000 threshold; households earning more than $250,000 annually would not be eligible.
If the government were to cancel all eligible debt from federal student loans, it would “affect more than 42 million Americans and eliminate all student loan debt for more than 75 percent of borrowers,” writes The New York Times. Eliminating privately held debt would prove more complicated. Warren says the government would mediate between private loan companies and borrowers to attempt to eliminate debts.
“The enormous student debt burden weighing down our economy isn’t the result of laziness or irresponsibility,” Warren wrote on Medium. Rather, she said, it’s the result of “pushing families that can’t afford to pay the outrageous costs of higher education towards taking out loans” rather than increasing federal funding or state-level accountability.
Eliminating tuition at public colleges
Warren’s plan also would make public college debt-free. Part of her higher education platform for several years, the proposal would apply to two- and four-year schools and would hinge on increasing federal investment in higher education. Warren also has called for expanding Pell Grant eligibility and funding to better cover college students’ living expenses and basic needs.
Closing achievement gaps
Further targeting socioeconomic and racial gaps, the plan would prohibit consideration of citizenship status and criminal history in college admissions, transition federal investments out of for-profit colleges, and install annual state audits to identify “shortfalls in enrollment and completion rates for lower-income students and students of color.” States that show significant improvements would receive more federal money, writes The Chronicle of Higher Education.
Warren also proposes boosting funds for minority-serving institutions, including $50 billion for historically Black colleges and universities (HBCUs). This emphasis reflects a growing realization that the student debt crisis has hit the hardest at HBCUs, writes The Wall Street Journal. Students at HBCUs leave college with loan debt that is on average 32 percent higher than that of peers at other public and non-profit institutions. HBCU graduates also appear to struggle disproportionately to repay that debt.
Critics question fairness, viability
Warren intends to fund these policies with a two percent tax on corporations and “ultra-millionaires” with wealth of $50 million or more, estimating that it would generate $2.75 trillion over 10 years.
Critics, however, point out the difficulty of accurately measuring wealth—which can take many forms—and fear that it would spur new tax-avoidance strategies. Others say that Warren’s plan could put undue burden on college-educated taxpayers who already paid for their schooling. Clare McCann, deputy director for federal higher education policy at New America, said most people struggling with student loan debt aren’t earning up to a quarter million dollars each year.
“Debt forgiveness would transfer federal dollars to the disproportionately middle- and high-income students who went to college and wouldn’t help borrowers who have already repaid their debts or Americans who never went to college because they didn’t want to take on the debts,” she said.