WASHINGTON – Sen. Elizabeth Warren would capitalize on the federal government’s current legal authority and begin canceling existing student loan debt on her hypothetical first day in office.
In a plan released Tuesday, Warren said she would direct the Secretary of Education to “use their authority to begin to compromise and modify federal student loans consistent with my plan to cancel up to $50,000 in debt for 95% of student loan borrowers,” which equals about 42 million people.
“We’re facing a student loan crisis — one that’s holding back our economy and crushing millions of American families,” Warren said in a release, adding she previously introduced a plan that would “broadly cancel student loan debt, provide universal tuition free public two- and four-year college and technical school, ban for-profit colleges from receiving federal aid, and help end racial disparities in college enrollment and resources.”
“But the Department of Education already has broad legal authority to cancel student debt, and we can’t afford to wait for Congress to act,” she said.
As of March 2019, there is a total of $1.6 trillion in federal and private student loan debt that borrowers owe. More than $1.4 trillion is in federal student loan debt.
Warren last year introduced a proposal that would eliminate up to $50,000 in student loan debt for every indebted person with a household income of less than $100,000. Under her plan, borrowers who make $100,000 and $250,000 would also be eligible to have a smaller portion of their debt forgiven.
Warren laid out that she was going to pay for the plan, which would cost $1.25 trillion over the next decade, by an “Ultra-Millionaire Tax,” which is a 2% annual levy that she wants to impose of 75,000 American families with $50 million or more in wealth.
In addition to introducing her Day 1 plan Tuesday, Warren provided a letter from Harvard’s Project on Predatory Student Lending that claims Warren has the legal ability to use executive power to cancel student loan debt through the Department of Education.
Eileen Conner, legal director of the organization, Deanne Loonin, attorney at Harvard’s Project on Predatory Student Lending, and Toby Merrill, director of the group, wrote in a letter that Warren’s plan is “lawful and permissible exercise of the Secretary’s authority under existing law.”
The letter states that the “power rests in the first instance with Congress” to cancel student loan debt. Under the Higher Education Act, however, Congress has a provision that allows a Secretary of Education to have “a more specific and unrestricted authority to create and to cancel or modify debt owed under federal student loan programs.”
“That provision empowers the Secretary to execute the broad debt cancellation plan you have proposed,” the letter continues.
Warren is the only presidential candidate to say they would going to eliminate student loan debt through executive power.
“If we want to achieve the kind of big, structural changes that will make our education system, our economy, and our society work for everyone, we’re going to need to use every tool, every scrap of opportunity that comes our way, to help working families,” Warren said in a release. “The future of our economy and the lives of a generation of student loan borrowers are at risk, and I’m committed to seeing this fight through no matter what.”
Several other presidential candidates have also said they will cancel student loan debt, including Sen. Bernie Sanders. Former Vice President Joe Biden previously said that those who make less than $30,000 wouldn’t have to pay their monthly loan payments and that interest would not accumulate.