Elizabeth Warren proposes cancelling student loan debt for millions of Americans

Elizabeth Warren proposes cancelling student loan debt for millions of Americans

Senator Elizabeth Warren announced a plan today to cancel the student loan debt of tens of millions of American citizen.

The proposal - which has made Warren the first major candidate in the presidential race to endorse a large-scale student debt forgiveness plan - would completely wipe out the debt of 75% of Americans with student loans, per analysis conducted by student loan experts.

It would cancel up to $50,000 in debt for those whose household income is less than $100,000, and remove smaller amounts of debt for people earning under $250,000. Overall, 95 per cent of Americans with debt would see some amount of forgiveness under the plan, according to the research done on behalf of the senator's campaign.

elizabeth warren Credit: Getty

The total cost of the proposal - which includes free undergraduate tuition at public universities - is expected to be $1.25 trillion over 10 years. However, Warren claims that this would be covered by her proposed tax on the "ultra millionaires" - that is - those who make over $50 million annually, and billionaires.

The presidential candidate claims that this student loan debt forgiveness plan would boost the economy by encouraging home-buying. It would also help constrict the racial wealth gap between white, black and Latino Americans, as research shows that black students default on their loan payments at a much higher rate than white students.

Warren's proposal is a breath of fresh air in the democratic landscape, as even Bernie Sanders - who proposed a free-college plan during the 2016 campaign - asserted that he would not endorse cancelling student loan debt.

The senator is, however, supported by Rep. Alexandria Ocasio-Cortez, who is known for being outspoken on the matter.

elizabeth warren Credit: Getty

Critics of the plan have said it is a "giant welfare program for the upper middle class", referencing the fact that it is often well-off households who owe the most in student loan debt. Warren has, however, counteracted those assertions by saying debt cancellation would be limited to $50,000 - a figure which would not wipe out the debt incurred by graduate degrees, including law and medical school.

Additionally, those whose household earn more than $25,000 would not see any debt forgiveness under Warren's proposal.