The downfall of 2020 Democrats’ student debt forgiveness

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A law student makes the case against Sens. Bernie Sanders and Elizabeth Warren's push for 'free' college in a new Wall Street Journal op-ed.

The Democratic presidential candidates’ costly plans for universal health care dominated the Detroit debates — but their plans for tackling the costs of higher education are every bit as ambitious, and controversial, even if they don’t prompt the same on-stage fireworks as the “Medicare-for-all” divide.

The college debt question is quickly becoming a defining issue for Democratic candidates. As with health care, they have a wide range of proposals – from completely wiping out the roughly $1.5 trillion in student loan debt to expanding grants to low-income students to making public college tuition-free. Moreover, many of the plans are wildly expensive and prompting serious debate over whether the solutions are practical for dealing with costs that lawmakers across the political spectrum agree are sky-high.

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“The big issue is the cost of a college education,” Michael Lux, a student loan expert and the founder of the Student Loan Sherpa, told Fox News. “Any plan addressing student loans needs to also address the rising cost of higher education.”

The two Democratic candidates with the most sweeping proposals for dealing with student loans are Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., who have both outlined plans to wipe out the debt accrued by college students through tax hikes for certain individuals and transactions.

Warren was the first Democratic candidate to propose a radical restructuring of how the country deals with student debt – unveiling a plan in April that would eliminate almost all student loan debt for 42 million Americans by canceling $50,000 in debt for each person with household income under $100,000. The Massachusetts senator’s plan would allow borrowers with a household income between $100,000 and $250,000 to be eligible for some debt cancellation, although not the full $50,000, while borrowers with a household income of $250,000 or more would not be eligible.

Warren also has proposed eliminating tuition and fees for two- and four-year public college degree programs along with investing $100 billion in Pell Grants, a federal aid program that requires no payback. The plan would also create a fund with a minimum of $50 billion intended to keep per-student spending at historically black colleges and universities and minority-serving institutions comparable to other area colleges.

Warren said earlier this year that her plan would be “more than covered by my Ultra-Millionaire Tax — a two percent annual tax on the 75,000 families with $50 million or more in wealth.”

Presidential candidate Bernie Sanders talks in Montgomery

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Under Sanders’ plan, which was unveiled in June, all student debt would be eliminated – no matter how much money a household makes – and students from families with incomes of $25,000 or less would have all of their college costs covered. Sanders’ proposal would also make public colleges tuition-free. The full cost of the plans is estimated to run around $2.2 trillion.

The plan would be paid for with a tax on stock trades, bonds, derivatives and other types of investments. According to Sanders’ calculations, the plan would save the average borrower $3,000 a year and allow millennials – the group hardest hit by rising college costs – to invest in big-ticket items like homes and automobiles.

“This is truly a revolutionary proposal,” Sanders said in a statement. “In a generation hard hit by the Wall Street crash of 2008, it forgives all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the ‘crime’ of getting a college education.”

A House version of Sanders’ College for All Act was co-sponsored by fellow Democratic presidential primary candidate, Rep. Tulsi Gabbard of Hawaii.

Proposals such as those by Warren and Sanders have rankled borrowers who have already gone through the trouble of paying off their student loans, while others argue that the plans penalize those who didn’t go to overpriced schools.

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