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.
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.
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.
