WASHINGTON — Sen. Elizabeth Warren of Massachusetts is unveiling a proposal to wipe out student debt for millions of borrowers, making her the only major 2020 presidential candidate to advance such an ambitious plan to relieve the growing burden of higher-education loans on Americans and the economy.
The proposal would cancel up to $50,000 in debt for people with annual household income under $100,000. Beyond that income threshold, smaller amounts of debt would be canceled, but no one with more than $250,000 in household income would be eligible.
To keep students from accumulating more debt in the future, Warren also proposes making two- and four-year public colleges tuition free, according to a plan unveiled in advance of a Monday evening CNN town hall focused on issues of interest to young voters.
With a price tag of $1.25 trillion over 10 years, Warren’s higher-education initiatives up the ante on an issue that most 2020 Democratic presidential candidates have been trying to address in more modest ways.
At issue is the top economic challenge for a key Democratic constituency — millennial voters, many of whom have gone to college and left school during a decade that has seen an explosion of student borrowing. Student loan debt has more than doubled, to about $1.5 trillion, over the last decade, according to a Federal Reserve report that found the trend has contributed to declining rates of homeownership among young adults.
“The time for half measures is over,” said Warren in a post on Medium describing her proposals. “My broad cancellation plan is a real solution to our student debt crisis. It helps millions of families and removes a weight that’s holding back our economy.”
The high-dollar proposal will surely face push back from Republicans but also from some Democratic rivals. Sen. Amy Klobuchar, D-Minn., has said she opposes tuition-free four-year public college, although she favors free community college. Pete Buttigieg, mayor of South Bend, Ind., has objected to broad student-debt cancellation, preferring more-targeted debt relief.
Warren said the cost of the program would be covered by some of the $2.75 trillion in revenue that would be raised from the “wealth tax” she has proposed — a 2 percent tax on Americans with assets worth more than $50 million, with an additional 1 percent surcharge on wealth over $1 billion.
With the 2020 presidential field nearing 20 Democrats, candidates have each been looking for ways to distinguish themselves. Warren, despite her higher national profile, has not been in the top tier in most polls and in recent fundraising reports.
Late last week, she distinguished herself by becoming the first major candidate to call for impeachment proceedings against President Donald Trump after the release of special counsel Robert S. Mueller III’s report on Russian interference in the 2016 election. Her position appeals to her party’s left wing but is at odds with congressional leaders and other Democrats who are wary of launching a process in the Democratic House that is unlikely to succeed in the GOP-controlled Senate.
A campaign aide said Warren’s impeachment pronouncement did not signal a shift in her focus on “big policy” initiatives that have been the hallmark of her campaign. She has offered detailed proposals on subjects such as child care, anti-corruption and breaking up big technology companies — all designed to address what she sees as inequities in the U.S. economic and political systems.
Sen. Bernie Sanders, I-Vt., was one of the earliest and most vocal proponents of tuition-free public college, beginning in his unsuccessful 2016 presidential campaign. Most of the other 2020 Democratic presidential candidates have offered proposals to ease student debt and make college tuition free, but most of those plans impose conditions such as income limits or public-service commitments in order to qualify.
Warren is proposing free tuition and fees at two- and four-year public colleges for students of all income levels, with costs shared by state and federal governments. She argues the policy should be universal, not targeted just on lower-income people, in the same spirit in which free public education is now available to all through high school.
She is also proposing additional federal spending on Pell Grants to help low-income students meet other nontuition costs; additional aid for black colleges; and more money for states that increase enrollment and graduation rates for people of color.
The debt forgiveness benefits would be based on income, but an analysis of the plan conducted for the Warren campaign by a group of academic economists estimates that the policy would provide some relief for more than 95 percent of all households with student debt and would wipe out all debt for up to 76.2 percent of indebted households.