What the 2020 applicants propose to do about student debt

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Democratic presidential candidates in partnership with Univision at Texas Southern University in Houston, Texas on September 12, 2019.

Frédéric J. Brown | AFP | Getty Images

Student loan borrowers are right to pay close attention to the 2020 presidential campaign.

Many Democratic presidential candidates have detailed plans to deal with what is increasingly being referred to as a student loan crisis.

Education debt in the United States has eclipsed credit card debt and auto debt. Today, the average graduate leaves school $ 30,000 in the red, up from $ 10,000 in the 1990s, and nearly one in three student borrowers are in default or default. Research has shown that debt makes it harder for people to buy homes and cars, start businesses and families, save or invest.

More than half of Americans say student debt is “a major problem” for the country, according to a new Politico / Morning Consult poll. Candidates take note of this.

“It is striking how much of a major issue student debt has become in this presidential campaign,” said James Kvaal, president of the Institute for College Access & Success.

Below are the applicants who have come up with big changes for student loan borrowers (or at least some of them).

Bernie sanders

Vermont U.S. Senator, Democratic presidential hopeful Bernie Sanders, gestures during the first round of the second Democratic primary debate of the 2020 presidential campaign season hosted by CNN at the Fox Theater in Detroit, Michigan on July 30, 2019.

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Senator Bernie Sanders, I-Vt., Plans to wipe the nation’s $ 1.6 trillion outstanding student loans, freeing 45 million Americans from debt.

“It really is a revolutionary proposition,” Sanders told the Washington Post. “In a generation hit hard by the 2008 Wall Street crash, he forgives all student debt and ends the absurdity of condemning an entire generation to a life of debt for the ‘crime’ of having a college education . “

The $ 2.2 trillion plan would be funded by a new financial transaction tax, comprising a 0.5% tax on stock transactions and a 0.1% tax on bond sales. This tax would increase to $ 2.4 trillion over the next decade, according to the senator’s office.

Elizabeth warren

Senator Elizabeth Warren

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According to Warren’s proposal, borrowers with a household income of less than $ 100,000 would get $ 50,000 of their student debt canceled.

People who earn between $ 100,000 and $ 250,000 would be eligible for a rebate on a sliding scale – the cancellation amount is reduced by $ 1 for every $ 3 a person earns over $ 100,000. And those who earn more than $ 250,000 would not get any debt relief.

The plan would likely be funded by a 2% annual tax that Warren proposes to levy on accumulations of wealth in excess of $ 50 million, with an additional 1% tax on wealth in excess of $ 1 billion.

“The first step in dealing with this crisis is to tackle head-on the outstanding debt that weighs on millions of families and should never have been necessary in the first place,” Warren wrote in his article. Medium announcing the plan.

In a Politico / Morning Consult poll, 56% of registered voters said they supported the Massachusetts senator’s proposal to cancel outstanding student loans by raising taxes for the wealthiest Americans.

Only 27% of voters said they opposed it.

Joe biden

Former Vice President Joe Biden

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Biden outlined some of his plans for student loan borrowers during a recent campaign stop at Keene State College in New Hampshire.

Those who earn less than $ 30,000 a year will no longer be required to make their monthly loan repayments, Biden said.

Other borrowers with so-called income-driven repayment plans would pay 5% of their discretionary income for their student loans, the former vice president said, while they are now paying between 12% and 20%.

Higher education expert Mark Kantrowitz said Biden’s plans were not making big waves.

“He’s not proposing to write off student loans, even in a targeted fashion,” Kantrowitz said. “They won’t get much attention from millennials.”

Some advocates point out that in 2005 Biden backed a bill that made it harder for people to get rid of their private student loans in bankruptcy.

Cory booker

Senator Cory Booker

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Senator Cory Booker, DN.J., has said he will forgive the student loan debt of public school teachers.

He also worked with other politicians to make it easier for borrowers to refinance their student loans at lower interest rates and to expand the reach of the civil service loan cancellation program. This program allows nonprofit and government employees to cancel their federal student loans after 10 years of payments.

Julien castro

Former US Secretary of Housing and Urban Development Julian Castro

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Under Castro’s plan, student loan borrowers would pay no more than 10% of their discretionary income each month. After 20 years – or 240 monthly payments – borrowers will have the remaining debt tax-free.

A Castro administration would cancel part of the student loans of people eligible for more than three years for means-tested federal aid, such as Medicaid.

It would also expand the civil service loan cancellation program and make it easier for borrowers to pay off their debt in the event of bankruptcy.

Kamala harris

Senator Kamala Harris

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Senator Kamala Harris, D-Calif, said she would write off student debt for Pell scholarship recipients who start a business in an underprivileged community and manage to keep that business afloat for at least three years.

Pell scholarships generally go to students from families with incomes of less than $ 20,000. Last year, 7 million people received it.

Andrew Yang

Andrew Yang, tech entrepreneur, Democratic presidential hopeful, gestures during the third Democratic primary debate of the 2020 presidential campaign season hosted by ABC News in partnership with Univision at Texas Southern University in Houston, Texas on September 12, 2019.

Robyn Beck | AFP | Getty Images

Yang calls for a “people’s bailout” and has said he will explore a partial reduction in student loans for recent graduates with the largest balances.

Borrowers could sign up for a 10-year repayment plan that caps their monthly bills at 10% of their salary. At the end of the decade, any remaining debt would be written off.

It would also make it easier for student loan borrowers to file for bankruptcy.

Beto o’rourke

Beto O’Rourke, Democratic presidential candidate, former congressman from Texas

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