-Student-loan debt is depressing
a whole generation
and stagnating
their earnings.
In response, some Democratic
presidential candidates
are proposing incredibly lenient
and expensive plans
to cancel current
student-loan debt altogether.
Among the candidates
who have specific plans,
Senator Elizabeth Warren
proposed $640 billion
in student-debt forgiveness,
targeting borrowers making less
than $250,000 a year,
while Julian Castro introduced
his own partial-forgiveness plan
for those with a lower income
or who are on public assistance.
Senator Bernie Sanders
with his plan
to cancel the entire $1.
6 trillion in student debt.
So why focus on student-loan
debt over something else?
For example,
Americans have about $1.
1 trillion of outstanding
car debt
according to
LendingTree data.
And cars are arguably incredibly
important to holding a job.
But having a college degree
has come to be as expected
as a high-school diploma,
and the cost of that diploma
has far outpaced
most students' ability
to pay.
2017 graduates owe an average
of around $29,000,
and that's not dischargeable
by bankruptcy or,
in some cases, even death.
At the same time,
earnings for college graduates
have leveled off.
Student-loan debt
causes borrowers to put off
starting a business,
having kids, buying a home,
and saving for retirement.
And student-loan debt
disproportionately affects
black students,
who typically owe $5,000 more
and earn 15% less
than the average graduate.
Given all that, it's no wonder
that student-debt forgiveness
is so popular.
-My family is making a grant
to eliminate
their student loans.
[cheers and applause]
-It's even been turned
into a game show.
-If you could build a structure
that would represent your
student debt, what would it be?
-It'd be a giant middle finger.
-But if borrowers aren't paying
those loans back,
the money has to come
from somewhere else.
Warren said that she'd pay
for her plan
with a tax
on ultra-millionaires.
-If we put that 2-cent
wealth tax in place,
we can do universal childcare
for every baby 0 to 5,
universal
pre-K, universal college,
and knock back
the student-loan-debt burden
for 95% of our students,
and still have nearly
$1 trillion left over.
-Sanders says he'll pay
for his plan
with a new tax
on financial transactions.
-Our proposal, which costs $2.
2 trillion over 10 years,
will be fully paid for
by a tax
on Wall Street speculation,
similar to what exists in dozens
of countries around the world.
-But critics say it could hurt
economic growth,
and investment in the process.
Other critics say that the plans
would only benefit
educated Americans,
who are already some of the
best-off people in the country.
Regardless, the plans
are popular
with the Democratic base,
which has an edge
over Republicans
when it comes to college
graduates and younger voters.
And as student-loan debt
continues to grow,
proposals to eliminate it
are likely to become
even more popular
in the future.
