Sen. Bernie Sanders (I-Vt.) unveiled a major student loan policy position Monday, adding “Debt Forgiveness for All” to his already-announced College for All Act proposal.
The 2020 presidential candidate announced his intention to cancel America’s $1.56 trillion federal and private student loan debt, calling it a “revolutionary proposal.”
“In a generation hard hit by the Wall Street crash of 2008, it forgives all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the ‘crime’ of getting a college education,” Sanders’ prepared remarks said.
Sanders made the announcement with several other lawmakers, including Rep. Ilhan Omar (D-Minn.) who planned to introduce similar legislation in the House that would eliminate all U.S. student debt.
Student debt has become a major issue in the race for the Democratic Party nomination for president, with rival candidate Sen. Elizabeth Warren (D-Mass.) unveiling a debt relief plan in April. Warren’s proposal offers $640 billion of loan cancellations, doled out to borrowers based on their household income. She estimated that 3 of every 4 borrowers would zero their balance through her program, and that more than 95% would receive at least partial repayment assistance.
Sanders’ proposal goes one big step further, promising loan forgiveness to every borrower — without considering each borrower’s capacity to repay their debt. A dentist repaying a six-figure debt on a six-figure salary, for example, would stand to benefit in the same way as a dental hygienist, assistant and secretary working in the same office.
Sanders planned to pay for his policy proposal with a tax on stock and bond transactions that he said would gather as much as $2 trillion in a decade. Warren, for her part, has said her plan would be financed via a tax on 2% annual tax on wealth surpassing $50 million.
The other aspects of Sanders “College for All” legislation remain in place. He espouses a tuition- and fee-free experience for current and future college students. As with his new forgiveness plans, College for All awards would be given regardless of whether the student’s family could reasonably expect to cover costs.
During the announcement on Monday, Sanders declined to compare his plan with Warren’s. He was asked why his plan helps all borrowers and families, not just those hailing from the lower or middle classes.
“I happen … to believe in universality,” Sanders said. “And that means if [President] Donald Trump wants to send his grandchildren to a public school [for free], he has the right to do that … We are saying today that public colleges and universities should be tuition-free and debt-free for all Americans.”
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1 Important Disclosures for Earnest.
2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 9/24/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
4 Important Disclosures for Discover.
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
5 Important Disclosures for SoFi.
UNDERGRADUATE LOANS: Fixed rates from 4.23% to 11.76% annual percentage rate (“APR”) (with autopay), variable rates from 1.90% to 11.66% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 11.83% APR (with autopay), variable rates from 1.80% to 11.73% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.30% to 11.98% APR (with autopay), variable rates from 1.97% to 11.89% APR (with autopay). PARENT LOANS: Fixed rates from 4.60% to 11.26% APR (with autopay), variable rates from 1.90% to 11.16% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 07/10/2020. Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org).
6 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicant’s ability to supply the necessary information for submission.
7 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.17% effective Sep 1, 2020 and may increase after consummation.