Vermont Senator and 2020 presidential hopeful Bernie Sanders announced his plan on Monday to cancel the $1.6 trillion in student loan debt held by nearly 50 million Americans. The Democratic-Socialist’s proposal would require Wall Street to pay for the outstanding debt through taxing trading transactions.
Ahead of the Democratic debates on Wednesday and Thursday, Sanders proposed a 0.5 percent tax on stock transactions, a 0.1 percent tax on bond trades, and a 0.005 percent tax on derivatives transactions. That would add up to about $2.2 trillion over the next decade, enough to wipe out outstanding student debt and then some, according to progressive economist Robert Pollin.
The bill is co-sponsored by Representatives Pramila Jayapal and Ilahn Omar.
Under the proposal, said Sanders during a press conference Monday “all student debt would be canceled within six months.” Sanders said the proposal would add a trillion dollars to the economy and could add 1.5 million new jobs.
“Now we’ve got millions and millions of families in this country who are struggling with student debt and maybe instead of just worrying about Wall Street we worry about those families and that generation and give them a break...This is for justice.”
Other candidates have backed plans to reduce the burden of student debt on young Americans, but none go quite as far as Sanders’ does. Senator Elizabeth Warren has her own $1.25 trillion plan to cancel $50,000 in student loan debt for Americans with household incomes under $100,000 and offer some assistance to those earning more. Joe Biden Pete Buttigieg and Kirsten Gillibrand also have plans to relieve student debt loads, but none as ambitious as Sanders’.
“Are you truly free if you graduate hundreds of thousands of dollars in debt?” Sanders tweeted after his speech. “Are you free if you cannot pursue your dream because you don't make enough to cover your student loan payments? We will cancel student debt because there is no freedom without economic freedom.”
Nicole Goodkind is a political reporter at Newsweek. You can reach her on Twitter @NicoleGoodkind or by email, N.Goodkind@newsweek.com.
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