President Elizabeth Warren Just Canceled Your Student Loan Debt
Guys, Elizabeth Warren is at it again, unveiling a proposal to cancel outstanding student debt and provide free higher education at public colleges and universities to anyone who wants it. Good lord, higher education for everyone? Fox News is going to have a fit. That will surely only leave the tiny vast majority of Americans who think higher education is a good investment susceptible to Warren's sneaky call for opportunity for everyone.
I managed to get a college scholarship, but then things turned upside down. The first boy I ever dated swooped back into my life and said he wanted to marry me. So I did what any sensible, mature 19-year-old would do: I said yes and dropped out of college.
Fortunately, once she got her head back on, she could afford the tuition -- just $50 a semester -- at University of Houston. She could even afford it on a waitressing salary, so she went back to school, got her degree, and became a teacher of special needs kids in elementary school.
Higher education opened a million doors for me. It's how the daughter of a janitor in a small town in Oklahoma got to become a teacher, a law school professor, a U.S. Senator, and eventually, a candidate for President of the United States.
Unfortunately, she says, that kind of opportunity seems a lot less common today, since states have cut back on funding higher education and costs have risen. (The annual cost for U of Houston -- including room, board, and books -- is $24,000 for in-state students today. In-state tuition alone is $8,724 a year). And now, most students who aren't already rich end up taking out tons of student loans. Warren notes all that student debt isn't just a bummer for students -- it's a drag on the economy.
It's reducing home ownership rates. It's leading fewer people to start businesses. It's forcing students to drop out of school before getting a degree. It's a problem for all of us.
And we're in this mess because of decisions made by government at both the state and national level: Instead of treating higher education as a social good, an investment in the future, like public schools, the costs of higher education have been left up to families, making it ridiculously costly and pricing higher education beyond the reach of millions. Warren's plan for college education has two parts: Eliminate most student debt, and then make sure anyone who wants a college education can get it.
First up, Warren's plan would cancel the first $50,000 in student debt for all Americans with household incomes under $100,000 a year -- and then would phase out slowly up to a limit of $250,000 household income. About 42 million Americans would benefit. Warren's team estimated that cancellation would affect 95 percent of the Americans who have student loan debt, and would completely wipe out the student debt of 75 percent of them. Eliminating student loan debt would be especially beneficial to black and Latinx families, and would help to close their wealth gap with whites.
And you want to talk economic stimulus? Forget cutting taxes on the already wealthy, who just plow the savings into making themselves richer. Eliminating all that student debt would free millions of middle class Americans to buy houses, start businesses, and spend money that would otherwise be going to service debt. Hey, it's that "growth from the middle" that Barack Obama was so fond of!
An economic analysis of the plan shows that the greatest beneficiaries of debt cancellation would be at the lower and middle economic strata, directly benefiting far more people than the Rich Fuckwads who have gotten richer off the last four decades of Republican tax cuts. Here, have a chart!
Beyond the personal gains for those folks, the resulting economic boost is likely to be substantial:
The experts also conclude that my plan will likely provide a boost to the economy through "consumer-driven economic stimulus, improved credit scores, greater home-buying rates and housing stability, higher college completion rates, and greater business formation."
Not mentioned by Warren: the very real improvement of mental health among people who will no longer be lying awake at night wondering how they'll ever pay their loans. A frightening number of people think about killing themselves over their impossible student debts, and a substantial portion actually do. A study published last year on student loan debt found
Overwhelming debt prevented 80% of borrowers from saving for retirement, 56% from buying a home, 42% from buying a car, and 50% from contributing to charity, according to the report. More than 85% said student loan debt was a major source of stress, and one in three said such debt is the biggest stress in their lives. [emphasis added -- Dok]
Maybe the US would take a tick or two up on those indexes of national happiness, even.
Then there's the Free College plan, which again, wouldn't just be nice for people wanting to study history and basket weaving, but would be a huge boost to the economy. Warren says, hey, why are we missing these opportunities, damn it?
The cost of college deters people from attending college. And it forces people to drop out before completing their degrees. Only about two-thirds of students complete a four-year public college degree in six years and only about a third of students complete a two-year public college degree in six years. The financial strain of attending college — the need to work many hours to cover costs — is a top reason so many people drop out.
Warren would have the federal government cover all tuition and fees at public two- and four-year colleges and universities. Beyond that, non-tuition costs of higher ed, like room and board, and those $400 biology textbooks, have grown 80 percent since the 1970s. That's beyond inflation. So Warren would also help families by pumping $100 billion into the Pell Grant program over 10 years, and expanding eligibility for grants.
On top of that, Warren would use her college initiative to address the educational and financial legacy of racism -- she doesn't use the word "reparations" here, but this would be part of addressing historic discrimination. Her plan would create a fund to support Historically Black Colleges and Universities as well as other institutions that primarily serve minority students, and would create federal incentives to steer extra education aid to states that improve enrollment and graduation rates for low-income and minority students. in another small policy sure to freak out the rightosphere, she'd also "prohibit public colleges from considering citizenship status or criminal history in admissions decisions."
Best of all? She'd move toward banning for-profit colleges, which are terrible for everyone but often prey on minority students, from receiving federal aid of any kind: student loans, Pell grants, or GI Bill benefits. It would be phased in after "an appropriate transition period," and would mean for-profit schools could "no longer use taxpayer dollars to enrich themselves while targeting lower-income students, servicemembers, and students of color and leaving them saddled with debt."
We hope Betsy DeVos just shivered in fear.
Best, Warren already has a pot of money in mind to pay for the whole thing: her big beautiful Eat The Rich wealth tax on those with assets over $50 million. That's estimated to generate $2.75 trillion over a decade. Warren's boffins estimate her entire college proposal -- both the debt elimination and the free tuiition -- would cost 1.25 trillion over 10 years, leaving plenty of Eat The Rich funds available to also fund her proposal for universal daycare and pre-K.
Damn, we would enjoy living in Elizabeth Warren's Swedish version of America!
There's already been pushback from exactly the sort of assholes you'd expect, like this schmuck at the Washington Examiner who says eliminating student debt for millions would be a "slap in the face" to people who struggled to pay off their own student loans. Lord knows that since many have suffered under an insane system, we must keep EVERYONE suffering. Well isn't that special!
Yr Editrix wasn't impressed:
Still, it's an inventive argument! We shouldn't reform sentencing for nonviolent drug offenders, because it's a slap in the face to those who did 20 years for possession of a joint. Advances in medical treatment? A slap in the face to those who died honestly from diseases. We shouldn't have ended slavery, because wasn't that a slap in the face to all those who suffered in involuntary servitude!
Still, we can see some use to such logic: Forty years of skewing tax policy to benefit the investor class really HAS been a slap in the face to middle and lower income Americans. So how about we fix THAT?
You know who's still paying off student loans? Us. Give us money please, if you are able!
Doktor Zoom's real name is Marty Kelley, and he lives in the wilds of Boise, Idaho. He is not a medical doctor, but does have a real PhD in Rhetoric. You should definitely donate some money to this little mommyblog where he has finally found acceptance and cat pictures. He is on maternity leave until 2033. Here is his Twitter, also. His quest to avoid prolixity is not going so great.