Sen. Elizabeth Warren discussed her student loan debt relief plan and answered questions about the cost of education and college accessibility Monday afternoon during a virtual press event.
The plan, which she introduced with Senate Minority Leader Chuck Schumer, outlined how President-elect Joe Biden can cancel up to $50,000 in federal student loan debt for borrowers, Warren said. She and Schumer developed the plan because about 43 million Americans have a combined total of $1.5 trillion in federal student loan debt.
“For tens of millions of borrowers, student loan debt has become an impossible burden,” she said.
If Biden were to use this plan to cancel student debt, it would save borrowers an average of about $200-$300 each month, Warren said. This extra money and smaller debt load would encourage people to make bigger purchases and contribute more to the economy, she said.
“This is the single-most effective executive action available to boost our struggling economy,” she said.
Many Democrats’ goal is to have tuition-free college, and there are many different paths that different politicians have lined up to achieve that goal. Warren wants families with a net worth of more than $50 million to pay a 2% tax on every dollar of their net worth and pay a 6% tax on every dollar above $1 billion. Warren said this tax would help pay for things such as universal pre-kindergarten in addition to tuition-free college.
However, the more short-term goal is lessening the financial burden of college, so people can build real wealth sooner after leaving their university.
Warren said she saw many students suffering after entering the workforce following the 2008 financial crisis and sees many of them still struggling today. She said she wants to help the students who are now possibly going into an even more strained job market so graduates hopefully do not run into those same problems.
“Our country owes it to you, to young people all across this nation, to deliver on the promise of opportunity and canceling student loan debt is one way we can do that,” she said.
Warren said cancellation of $50,000 in student debt would completely get rid of student debt for about three out of four borrowers. Student loan debt disproportionately affects people of color. This action would help close the wealth gap between Black and white people by 25 percentage points and the Latinx wealth gap by about 27 percentage points, she said.
Warren said she is also pushing for more federal money to be invested in historically Black colleges and universities and other minority-serving institutions.
In response to a student question, Warren also said one way the federal government can lessen the burden on students going to college is to increase the funding for the Pell Grant, which is a grant awarded to students who show exceptional financial need. Warren also said she wants to raise the level of income at which people can receive the grant.
“Pell used to cover most of the cost of getting an education. Now, Pell covers an ever-shrinking amount of that,” she said. “It ought to cover more of the cost, and it ought to cover more families.”
Although this plan can help people who have already taken on student loan debt, Warren said there are many other steps that need to be taken in order to make sure education is helping students more than hurting them.
Warren said one of these steps is getting a new Secretary of Education because Betsy DeVos focused more on supporting for-profit administrators and for-profit colleges than supporting students.
“It’s about having people at the Department of Education that are not putting corporations first but are putting our students first,” Warren said.
She said she believes students will not only receive more help financially but also receive support from the federal government regarding campus issues under Biden’s Secretary of Education. Biden has not yet selected someone for this position.