Sen. Elizabeth Warren, a 2020 hopeful for the Democratic nomination for president, is announcing a bill, The Student Loan Debt Relief Act, today that will cancel student loan debt for about 45 million Americans.
Warren is partnering with Rep. James Clyburn, D-S.C., the third-ranked Democrat who will sponsor a companion bill in the House of Representatives.
The bill would forgive up to $50,000 in student loan debt for Americans in households earning less than $100,000 a year, which would give immediate relief to 95% of the 45 million or so people with student loan debt.
People earning above $100,000 will get partial relief, and households earning above $250,000 are not eligible for any relief. The legislation would automatically cancel the student loan debt without requiring borrowers to fill out any paperwork, and the government would use existing income and debt information to determine eligibility.
If you have private loans, you would need to refinance the debt into federal student loans to be eligible. Under the plan, the federal government also would suspend collection of loan payments for a year while the Department of Education goes through the process of loan forgiveness.
The bill also would lower the interest rate on all existing federal loans.
Warren’s 2020 campaign says she will pay for the debt relief and make tuition free at public universities with a wealth tax on the richest Americans. A wealth tax of 2% on earnings above $50 million, and a 3% tax on wealth above $1 billion would pay for the plan, Warren says.
In all, the debt cancellation would cost taxpayers about $640 billion, according to her campaign.
The bill also would make it easier to discharge private and federal student loans in bankruptcy.
Warren previously unveiled the plan back in April alongside Reps. Pramila Jayapal, D-Wash., Alexandria Ocasio-Cortez, D-N.Y., and Ilhan Omar, D-Minn., who are the co-sponsors of the bill in the House. Omar and Ocasio-Cortez of course have been under constant fire from President Donald Trump, who again attacked them via tweet Tuesday morning.
In 2016 I almost won Minnesota. In 2020, because of America hating anti-Semite Rep. Omar, & the fact that Minnesota is having its best economic year ever, I will win the State! “We are going to be a nightmare to the President,” she say. No, AOC Plus 3 are a Nightmare for America!
— Donald J. Trump (@realDonaldTrump) July 23, 2019