With nearly 45 million people in the US accumulating student loan debt, equal to a staggering $1.5 trillion dollars, second-time presidential candidate and Vermont Senator Bernie Sanders has developed a plan to erase it all.
On Monday, the 77-year-old senator proposed a plan, revised from his original plan laid out during his 2016 presidential campaign, intended to tackle all student debt, including future students destined for high education.
Other Democratic candidates, including Sen. Elizabeth Warren and Julián Castro, have also mentioned plans for student debt forgiveness.
Though still in the trillions, Warren’s platform is more frugal than Sanders’s plan and only forgives $50,000 for people with a household income of $100,000 or less.
Many speculate that Sanders’s plan, which was announced only two days before the first televised Democratic debate, was a desperate reach for Warren’s grip on a younger demographic of voters.
Sanders’s plan relies on tax reform and something called the “Wall Street speculation tax”.
Describing student debt as “a lifetime of debt for the crime of doing the right thing,” Sanders said, “America bailed out Wallstreet now it is time for Wallstreet to come to the aid of the middle class.”
He said he intends to create a new tax on financial transactions on Wall Street including a .5 percent tax on stock transactions.
The Sanders campaign estimated the plan would take about 10 years to pay off the trillion dollars proposed legislation, but the secretary of education would have only six months to forgive the outstanding balances once the bill is signed into law.
The hope is that student debt forgiveness will put a spark in the US economy by freeing up borrowers to purchase homes and improve their credit.