Bernie Sanders wants to forgive your student loan debt

by TMO Staff

When Bernie Sanders ran in the 2016 presidential election, his plan for free college tuition could not go far due to his defeat then. Second time around, it is once again a part of his campaign, with his promise to forgive all outstanding student loan debt.

Another Democratic presidential candidate, Massachusetts Senator Elizabeth Warren, is also backing the elimination of the majority of the country’s outstanding student debt. However, she is not depending on the presidential election’s outcome for her proposal to materialize.

According to CNBC, Warren announced, last week, with Rep. James E. Clyburn (D-S.C.) about their plan to bring forth legislation in the Senate and House to eliminate up to $50,000 in student loan debt for 42 million Americans.

“It’s time to decide: Are we going to be a country that only helps the rich and powerful get richer and more powerful, or are we going to be a country that invests in its future?” Warren told the news outlet.

Student loans are getting more and more attention recently by presidential nominees and Congress, mainly due to its substantial increase in the last decade. Per a Bloomberg article, in 2009, total student loan debt stood at $675 billion. The number is now at about $1.6 trillion.

Student loans have not been a completely ignored topic for the current administration as well. Last year, President Donald Trump signed into law a bill allowing people with cancer to be able to take a break on their federal student loan payments.

But, as CNBC points out, even after more than ten months since the bill took effect, impacted borrowers suffering from cancer still are not able to ask for the deferment of their payments. The issue here is that the Department of Education has not provided the companies that administer federal student loan programs with an official application yet. Without an application, the impacted borrowers cannot apply for the deferment.

Regarding Sander’s loan forgiveness plan, the skeptics of the plan believe the government does not have the financial power to do so and the plan will add too much to the national debt.

Sanders’ counter-reasoning, popularly supported by Rep. Alexandria Ocasio-Cortez (D-N.Y), is that the tax cuts introduced by Republicans have cost the government more money than the student loan forgiveness would.

Although the Republican Tax Cuts and Jobs Act of 2017 cost estimates vary, nonetheless the most recent and reliable numbers from the Congressional Budget Office (CBO), a federal agency that provides budget information to Congress, support these claims.

According to the Guardian, this year, the CBO estimated that the new tax law would add $2.3 trillion to the national debt by 2028. Although the projected economic growth of about $461 billion would bring this number down, tax cuts will still lead to a $1.9 trillion addition to the national debt. This figure is more than the $1.6 trillion addition that the student loan forgiveness plan is advocating.

Whether citizens are skeptical about Sanders’ plan or they are supporting it, the increasing student loans topic is gaining a lot of attention this election cycle from officials as well as news media.