Bernie Sanders proposes plan to cancel all $1.6 trillion of student loan debt

Bernie Sanders proposes plan to cancel all $1.6 trillion of student loan debt

Vermont senator and Democratic presidential candidate Bernie Sanders unveiled a bill on Monday to wipe out all student loan debt, one of his signature issues. Currently 45 million Americans owe $1.6 trillion in student loans, a debt that can take decades to pay off, especially in a difficult job market. More than 40% of recent college graduates work in jobs that do not typically require a college degree, according to the U.S. Census Bureau and U.S. Bureau of Labor Statistics.

Sanders, along with Representatives Pramila Jayapal, Ilhan Omar and Alexandria Ocasio-Cortez, proposed taxing Wall Street to pay for the bill. By placing a 0.5% tax on all stock, bond and derivative transactions, they plan to raise $2.2 billion in ten years by. In addition, Sanders proposed increase spending on work-study programs, building up federal grant programs for low-income students, and  making public colleges and historically black colleges tuition-free.

"This proposal completely eliminates student debt in this country and ends the absurdity of sentencing an entire generation, the millennial generation, to a lifetime of debt,” Sanders said at the unveiling of the bill. "The American people bailed out Wall Street. Now, it is time for Wall Street to come to the aid of the middle class of this country."

Sanders' fellow Democratic 2020 hopeful have unveiled similar plans. Senator Elizabeth Warren proposed canceling $50,000 in student loan debt for anyone with an annual household income of under $100,000, while offering "substantial cancellation" to those with incomes between $100,000 and $250,000.

Meanwhile, former Vice President Joe Biden and Senator Amy Klobuchar (D-MN), proposed free two-year community college, and Senator Sen. Kirsten Gillibrand backed various proposals, including a moderate plan that eliminates tuition and fees for families making up to $125,000 a year.

As for President Donald Trump, who is running for re-election in 2020, he revealed a ten point plan last March to reform the Higher Education Act, the primary legislation that governs higher education. As explained by Forbes, he proposed to limit student loan borrowing, simplify student loan repayment and eliminate public service loan forgiveness.

Previously Trump claimed the middle class would be the primary beneficiaries of his tax cut, and the wealthy would not benefit. Both claims were rated false by Bloomberg in December 2018, and a recent study found that the tax cut "failed to do anything but give rich people money."