The University Network

How The 2020 Candidates Will Address Student Loan Debt

As graduating seniors unravel their freshly-printed diplomas, it’s hard for them to see anything but a bill.

Today, U.S. college students are paying more in student loans than ever before. Seventy percent of students take out student loans, and they accumulated an average debt of $37,172 per person.

Overall, Americans owe more than $1.56 trillion in student loans, which is $521 billion more than the total credit card debt in the United States.

It’s a vicious cycle.

Increasingly, high tuition costs are forcing students and their parents to take out high-interest-rate loans that can take decades to pay off. But recent graduates’ wallets aren’t the only thing to be worried about. Student debt greatly impacts the economy. It hinders young people’s ability to buy a home, start a business or be an active consumer.

As we approach the 2020 primaries, some bold solutions to alleviate student debt have already been proposed by the 2020 candidates.

Here is how the candidates plan to address student loan debt:

Sen. Elizabeth Warren (D-Mass.)

Recently, Sen. Warren proposed a progressive plan that would cancel up to $50,000 in student loan debt for 42 million borrowers. It is estimated that the debt cancellation plan would create a “one-time” $640 billion cost to the government.

But, to Warren, alleviating one generation’s student loan debt isn’t enough. She also wants to make all public colleges free through her Universal Free College Program, so America never has another student debt crisis.

In total, Warren’s Universal Free College Program and plan to eliminate student debt would cost an estimated $1.25 trillion over 10 years. To pay for it, Warren suggests implementing a 2-percent annual tax on the 75,000 richest families in the United States. Her campaign estimates the tax would bring in $2.75 trillion over 10 years.

“We can address the student loan crisis and cancel debt for families that are struggling,” Warren wrote in a post. “We can provide truly universal free college. We can fix some of the structural problems that are preventing our higher education system from fairly serving lower-income students and students of color. We can make big structural change and create new opportunities for all Americans.”

To read Elizabeth Warren’s positions on higher education and other key issues, click here.

Sen. Bernie Sanders (I-Vt.)

Sen. Sanders made a name for himself during his 2016 campaign, during which he turned free public college into a mainstream topic. His plan, called the College For All Act, primarily seeks to eliminate tuition and fees for families making under $125,000 per year. But it also includes a strategy to alleviate student loan debt.

The Act would restore the student loan formula that was in effect until 2006, lowering student loan interest rates by almost half, from 4.32 percent to 2.32 percent for undergraduate students. The legislation also ensures that rates never rise above 8.25 percent and enables borrowers to refinance their loans based on the interest rates for current students.

“The high level of student loan debt is causing irreparable harm to families across the United States, and the economy as a whole,” Sanders tweeted.

To read Bernie Sanders’ positions on higher education and other key issues, click here.

Sen. Kamala Harris (D-Calif.)

Harris supports refinancing student loan debt and improving student loan forgiveness. She believes these measures would enable young people to become active consumers, and, in turn, benefit the economy.

She states: “Even though 42 million Americans are saddled with student loan debt, 7.6 million are in default, and a quarter are behind on their student loan payments, these loans cannot be refinanced the same way people are able to refinance a mortgage, car loan, or business debt. Instead of protecting students, Congress has passed law after law making student debt the worst kind of debt for Americans and the best kind of debt for banks and debt collectors. Americans must be given the opportunity to refinance student loans at today’s lower rates.”

Specifically, Harris would implement programs to allow students to refinance their loans at current interest rates. Additionally she wants to expand student loan forgiveness opportunities and income-driven repayment options for borrowers. She will give preference, however, to individuals in public service careers, such as teaching.

To read Kamala Harris’ positions on higher education and other key issues, click here.

Sen. Cory Booker (D-N.J.)

To alleviate the financial burden placed on current student loan borrowers, Sen. Booker has vocalized his dedication to both protecting students from predatory loans and resolving the “backlog” of student loan forgiveness requests.

But he is more focused on making education affordable for those who have yet to go to college.

Policy-wise, he helped push forward the Debt-Free College Act of 2018, which would simplify the Free Application for Federal Student Aid (FAFSA) form and encourage states to invest more money into providing grants for students seeking higher education, particularly for low-income students and students of color. Ideally, the grants would cover the “full cost” of a college education, which includes textbooks, living costs and transportation. Under this plan, students would no longer accumulate debt.

“We constantly tell young people that higher education is the key to success. Yet, our current system punishes them for seeking an education through predatory loans and saddling them with outrageous debt,” Booker said in a statement. “For the millions of students across the country, we must do better … .”

To read Cory Booker’s positions on higher education and other key issues, click here.

Sen. Kirsten Gillibrand (D-N.Y.)

Eliminating student debt is one of Sen. Gillibrand’s top priorities. She introduced the Federal Student Loan Refinancing Act, which would allow students to refinance their loans from 6.8 percent — what they are paying now — to 4 percent.

“Student debt is at a crisis level in this country, and it holds our whole economy down,” she tweeted. “One of the first things I’d do as president is [to] allow all students to refinance their loans at 4%. The federal government shouldn’t be making money off the backs of our students, period.”

To read Kirsten Giilibrand’s positions on higher education and other key issues, click here.

Andrew Yang, N.Y. Entrepreneur

As a borrower, himself, Yang understands how student loans can hamper a young person’s ability to finance their adult life. He is in support of increasing student loan forgiveness efforts to help those who have already graduated from college. He also wants colleges to be more transparent about their students’ post-graduation debt and salary figures.

Specifically, if elected president, he has vowed to propose a “Student Loan Emancipation Act,” in which the federal government would buy all student loan debt, and borrowers would then pay the federal government 10 percent of their annual salary until they have paid off their loans. If they still owe money after 10 years, their loans will be forgiven.

Additionally, as part of his long list of suggestions, Yang has committed to ask colleges and universities to forgive some, or all, of the loans taken out by students who failed to graduate. He also has proposed allowing students to discharge their student loan debt through bankruptcy, which he believes will force lenders to work with students “in good faith.”

To read Andrew Yang’s positions on higher education and other key issues, click here.

Pete Buttigieg, Mayor of South Bend, Indiana

Buttigieg, as a millennial who has had to pay off his own student loans, understands the need to lower student debt. He recently told Claremont Colleges’ student newspaper that he would approve of legislature that would allow students to refinance their loans at lower interest rates, and he supports improving accessibility to the Public Service Student Loan Forgiveness Program. Specifically, he wants it to be easier for teachers and public servants to have their student loans forgiven.

To read Pete Buttigieg’s positions on higher education and other key issues, click here.

Julián Castro, Former Housing and Urban Development Secretary

In addition to making tuition free at all public colleges, universities, community colleges and technical and vocational schools, Castro’s “People First Education Plan” seeks to alleviate the burden of student loan debt by making sure no borrower pays “more than their income allows.”

Specifically, under his plan, borrowers wouldn’t have to pay until they are earning at least 250 percent of the poverty level. Until that point, monthly loan payments of those borrowers would be $0, and half of their unpaid interest would be exempted after three years.

And even when borrowers are earning enough to start paying back their loans, their monthly payments wouldn’t exceed 10 percent of their monthly income. After 240 monthly payments, including months when the repayment amount was capped at $0, if any, the remaining amount would be forgiven.

Wayne Messam, Mayor of Miramar, Florida

Messam presents a “straightforward” solution to the student debt crisis: cancel all debt. According to Messam, alleviating all student debt would provide “immediate financial relief” for all borrowers, and allow them to save or invest their money.

“The economic benefits would be felt nationwide,” he states on his website.

He cites research conducted by economists at the Levy Economics Institute of Bard College that claim eliminating all student debt would reduce unemployment, create jobs and raise the number of degrees achieved, among other things.

Sen. Amy Klobuchar (D-Minn.)

Recently, Sen. Klobuchar asked the U.S. Department of Education to address the mounting student loan forgiveness requests from borrowers who have been “cheated or defrauded.”

“Students should never have to worry about these scams as they look to improve their lives & careers,” she tweeted.

Specifically, she has co-sponsored the Keep Student Loans Affordable Act and the Student Loan Affordability Act, both of which would keep student loan interest rates from rising. She has also co-sponsored the Bank on Students Emergency Loan Refinancing Act and the RED (Reducing Educational Debt) Act — both acts would allow borrowers to refinance their loans at lower interest rates.

To read Amy Klobuchar’s positions on higher education and other key issues, click here.

Beto O’Rourke, Former Democratic Representative of Texas

Policy-wise, O’Rourke has a few thoughts on how to address the student loan crisis, which he expressed during a Q&A with The Cougar — the University of Houston’s student-run news organization.

“One is if you agree to come back and serve your community in an in-demand, under-served area, we should wipe your debt clean or not allow you to accrue it to begin with,” he said. “Second, if we’re going to subsidize federal student loans and federal grants, then when (sic) should have a commitment from institutions of higher learning that they’re going to curb the inflation for tuition, room and board.”

To read Beto O’Rourke’s positions on higher education and other key issues, click here.

Rep. Tulsi Gabbard (D-Hawaii)

Gabbard has voiced her support of Sen. SandersCollege For All Act, which primarily aims to eliminate tuition and fees for families making under $125,000 per year. But the Act also suggests some measures to address the student loan crisis.

Under the Act, undergraduate student loan interest rates would drop to 2.32 percent. It would also allow those who have already graduated from college to refinance their loans to match the rates that would be available to current students. Lastly, it would ensure that interest rates could never climb higher than 8.25 percent.

To read Tulsi Gabbard’s positions on higher education and other key issues, click here.

Joe Biden, Former U.S. Vice President

Biden has been heavily criticized for a bill he helped push forward while he was a senator in 2005, which made it impossible for student loan borrowers to discharge their loan debt in bankruptcy.

There is little to suggest Biden has had a huge change of heart on this matter. However, while he was serving as vice president, the Obama administration requested that Congress pass a law that would reverse the change that Biden had pushed forward in 2005, and, once again, make student loan debt dischargeable through bankruptcy.

To read Joe Biden’s positions on higher education and other key issues, click here.

President Donald Trump

In Trump’s proposed 2020 budget, he suggests creating one uniform student loan repayment plan, in which borrowers would pay a monthly fee of 12.5 percent of their discretionary income.

In his proposed budget, Trump also suggests eliminating the Public Service Loan Forgiveness program. If his budget is approved, undergraduate loans would be forgiven after 15 years of payment, and graduate school loans would be forgiven after 30 years.

To read Donald Trump’s positions on higher education and other key issues, click here.