Elizabeth Warren Proposes Bill to Cut $640b in Student Debt
July 23, 2019
By: Hallie Busta
Source: Education Dive
Elizabeth Warren, D-Mass., on Tuesday introduced bicameral legislation outlining a key piece of her proposal to expand student loan forgiveness to 42 million federal and private borrowers. Put forward with House Majority Whip James Clyburn, D-S.C., the Student Loan Debt Relief Act would cancel up to $50,000 in debt for people with household incomes under $100,000 and gradually reduce the amount forgiven above that income threshold through $250,000. Remaining loan balances would be refinanced. Private borrowers will have the option to refinance their debt as Direct Loans, thus making them eligible for forgiveness under the proposal.
Warren formally announced the plan in June. But she indicated it was coming in April, when she made a broader proposal that put her in the ring with other Democratic presidential hopefuls looking to expand free college programs and eliminate the country’s growing student debt load. In a blog post earlier this year, she said the proposal to cut student debt would cost the government $640 billion. Add in the free college element, and the tab would grow to $1.25 trillion over the next decade. It would be financed by an annual tax of 2% to 3% on households worth $50 million or more, which would raise $2.75 trillion in 10 years, she explained.