With the first Democratic primary debates coming up quickly, Senator Bernie Sanders is trying to stake his claim on second place in the polls by proposing a bill that will eliminate all American student debt.
The legislation will be submitted Monday by Sanders that will cancel some $1.6 trillion in student loan debt for both graduate and undergraduate people. The plan is said to affect nearly 45 million Americans in all.
His biggest current rival, Senator Elizabeth Warren, has proposed a similar plan recently, and it seems that this is Sanders attempt to one-up her.
While Warren’s plan is set to cancel student debt as well, there are limitations to how much an individual can qualify for and receive. According to her debt relief package, it is based on income eligibility, forgiving $50,000 of loan debt for students who make less than $100,000 a year. Her plan is said to affect roughly 42 million Americans.
Another key difference is the way they are paying for such substantial debt eliminations. Sanders’ plan proposes to tax Wall Street for the funds necessary. Included in the taxes are a 0.5% tax on stock trades, a 0.1% fee on bonds, and a 0.005% tax on derivatives.
According to Sanders, this will raise nearly $2.4 trillion during the next ten years and allow him to write off student debt, as well as reduce tuition costs for public universities, colleges, and trade schools.
In contrast, Warren plans to impose a 2% tax on wealth that is greater than $50 million, targeting the top 0.1% of households in the nation. Her plan is said to raise about $2.75 trillion over the next ten years. Like Sanders, her plan’s funding would pay off student debt and make tuition at public colleges and universities free, but hers would also cover a universal child-care program.
However, many are critical about the plans and their ability to work.
Sanders’ plan, for instance, is said to be only really helping out higher educated Americans who already make significantly more than much of their fellow American’s. Therefore, some believe this is simply a way to help out the more affluent families of America.
Still others, such as some tax experts, say that the amount of proposed funding to be raised are highly optimistic in nature and may not be reached.
This is also said about Warren’s plan, as hers is said to raise even more money but be dependent on America’s wealthiest families, who are well known for finding ways out of similar penalties on their assets. If the funding for either of the proposed plans does not come to fruition, it will significantly raise the national deficit, a cost we cannot afford to take.
Sanders calls his debt relief package the “Inclusive Prosperity Act” and says that it is meant to make it possible for students to be able to buy homes and cars that they could otherwise not afford due to the high rate of student debt.
He says, “We have for the first time in the modern history of this country a younger generation that if we don’t change it, and we intend to change it, will have a lower standard of living than their parents, more in debt, lower wages than their parents, unable to buy the house that they desire.”
Sanders’ claims that “I think the time is now for Wall Street to repay the obligation to the American people.” Referring to when Congress provided $700 billion in federal loans and trillions more to Wall Street during the crash of 2008. He added, “If we could bail out Wall Street, we can sure as hell reduce student debt in this county.”