WASHINGTON – Senator Elizabeth Warren does not want to wait until she is President to eliminate student debt.
Sen. Warren has gained a lot of momentum since she said that she wanted to eliminate student debt. This is not just a talking point for her either. She is partnering with Representative James Clyburn to introduce bicameral legislation to do so. The legislation will appear in the upcoming weeks.
Her Plan To Eliminate Student Debt
The plan from Sen. Warren and Rep. Clyburn will eliminate student debt for about 42 million Americans. Her plan is to eliminate about $1.5 trillion in student loans. The debt cancelation will be based on how much an American earns in a year.
For those who earn under $100,000, the legislation will cancel $50,000 of student loan debt. According to Student Loan Hero, the average student loan debt is around $30,000. There will be “substantial debt cancellation” for those who make between $100,000 and $250,000. No loan forgiveness for those who earn $250,000 or more annually.
Most of the time, student debt cancellation can only happen for students who take out federal loans. Private loans are not normally canceled. The upcoming proposal will make it possible to cancel private student loans.
Federal student loans that become forgiven end up taxed as income. This means that depending on how much is forgiven; a large bill is still paid to the government. Sen. Warren’s plan indicates that forgiven loans will not be taxed as income. Warren is aiming for total loan forgiveness in her plan.
Many people have asked how student loan elimination is going to be paid for. Sen. Warren has a plan for that. Her campaign plan is to install an “Ultra-Millionaire Tax” to fund this program. This means that those who have a net worth of $50 million will receive a two percent annual tax. It is unclear at the moment whether this is how she will fund the upcoming legislation.
Eliminating student debt is the reason why Sen. Warren is gaining popularity. Once she revealed her plan to do so, Warren shot up in the polls. Polls have indicated that 49 percent of voters are considering voting for Warren. She beats out Sen. Kamala Harris and Sen. Bernie Sanders in this poll.
It’s not only the polls where she is seeing a rise. BetOnline now has Sen. Warren at +700 odds to become the Democratic nominee. She was before at +1400 odds. She now beats out Kamala Harris in these odds. Once she introduces the legislation, she will likely shoot up in the election odds boards and polls. Her popularity will increase even further if the bill manages to pass.