The Student-Loan Debt Crisis: The Democratic Candidates’ Proposed Solutions
How are the 2020 Candidates approaching one of the largest problems for young Americans today?
The Progressive Teen Contributing Writer
The average student in the United States will graduate from college with approximately $28,650 in student-loan debt. The 2020 Democratic presidential candidates agree that something needs to be done to stop this crisis in its tracks, however, as with many other issues in the 2020 election, the Democrats have a multitude of different approaches.
Starting with the most radical, Senator Bernie Sanders of Vermont proposes canceling all student debt regardless of income. The Vermont senator backs free public college, university for all, and he aims to significantly reduce the amount taken out in loans for private college. Senator Sanders suggests placing a transactional tax on Wall Street, which he projects will raise $2.4 trillion in revenue to cover the cost of public college for all. Senator Sanders also proposes that states cover 33% of this cost, with the federal government covering the rest. For those who are already deep in debt, he will designate 1.6 trillion federal dollars to bail them out.
Senator Elizabeth Warren’s views are similar to Senator Sanders. She seeks $640 billion in student debt cancellation and advocates for an “Ultra-Millionaire Tax” to cover four years tuition for public college, her form of a “wealth tax.” Senator Warren’s loan-forgiveness plan would cover up to $50,000 of student debt for families with an annual income less than $100,000. However, unlike Senator Sanders’s proposal for free college regardless of income, she suggests a tiered system, with less debt relief for families making $250,000 and above. Warren then proposes $1 less assistance for every $3 earned over $250,000, allocating more funds for put lower income students. The Massachusetts Senator also proposes $50 million of funding for historically black colleges and universities.
Former Vice President Joe Biden would like to adopt a system favored by the Obama Administration: Continuing public schooling through Grade 12, followed by two years of free community college or technical school. Furthermore, Biden would generate revenue to reduce student debt by closing tax loopholes. He would also reduce the interest rate on federal student loans. Additionally, Biden suggests extending Pell Grants to high school students. A Pell Grant is money the government provides to pay for college, and, unlike a loan, does not need to be repaid. Vice President Biden also campaigns that he will modify the existing “Public Service Loan Forgiveness” program to reduce student-loan debt for teachers.
Similarly, former Representative from Texas Beto O’Rourke plans to cancel student-loan debt after five years for public school teachers. O’Rourke also plans to forgive 10% of a person’s debt if they are employed in a public interest job. O’Rourke would also expand the “Public Service Loan Forgiveness” program to erase public workers’ debt after 10 years. Like Vice President Biden, O’Rourke would lower the interest rate on federal loans.
In addition to providing three million dollars in annual funding to historically black colleges and universities, former Secretary of Housing and Urban Development Julián Castro plans to build transparency in student-loan programs and forgive loans for recipients of federal aid such as food stamps or Medicaid. Castro’s plan will also postpone the repayment of loans until the borrower’s earnings are 250% over the federal poverty standard. Thereafter, the borrower’s loan repayment would be capped at 10% of his or her salary, so debt repayment does not place them right back at the poverty line. Plus, after 240 monthly payments (20 years), he promises forgiveness of any remaining balance so the borrower is not indebted for his or her entire life. Further, Castro’s “People First Education Plan” calls for free public and community colleges and vocational schools.
Senators Cory Booker and Kamala Harris share a basic approach to the student-loan debt crisis. Like Representative O’Rourke, they aim to fix the “Public Service Loan Forgiveness” program to forgive public workers’ debt after 10 years. Like Biden and O’Rourke, the senators also plan to decrease the interest on federal loans, and to increase financial aid until students do not need loans, a proposal South Bend, Indiana’s Mayor Pete Buttigieg also supports. Booker and Harris also both suggest that, in addition to tuition, the government pay for other costs of college, such as textbooks, meal plans and more.
In addition to increasing financial aid to the point where a student does not need to take out a loan, Mayor Buttigieg advocates for debt relief in exchange for national service. To ensure that the most people possible get debt relief, he looks to increase the number of national service opportunities to over 250,000 in areas such as Climate Corps, Community Health Corps and Intergenerational Service Corps. Buttigieg proposes recruiting students from high schools, community colleges, historically black colleges and universities and vocational schools for these positions, in addition to reaching out to unemployed young Americans who are not in school. Under Mayor Buttigieg’s plan, over four million high school graduates would begin a debt-canceling national service program each year.
Entrepreneur Andrew Yang rejects the premise that higher education should be free. Rather, Yang would regulate tuition for colleges that receive public funding, as well as revoke a school’s tax-exempt status if its tuition is too high.
With the many competing approaches, it is clear that the student-loan debt crisis will remain a topic of vigorous debate throughout this election cycle.
