Bernie Sanders’ Plan To Ease Student Loan Debt

In June, 2019, Bernie Sanders announced his 2020 Presidential Election proposal regarding how he would cope with student debts. In his plan, he mentioned that if elected, he would forgive the entire student loan debt running at over $1.5 trillion. It is worth mentioning that Bernie Sanders’ student debt plan covers to forgive both private and federal student loans. 

This student loan debt plan is the most thorough student loan proposal ever presented. It is arguably the best ever, too, that was proposed by a presidential candidate. So, in case you also have a student loan, you should consider taking an in-depth look at Bernie’s proposal. If you are struggling to pay off your student debts, this could be an easy way out for you. 

Main Principles of Sanders’ Students Loan Forgiveness Program

Here are the most critical parts of Bernie’s free college plan:

  • Bernie Sanders’ student loan forgiveness program aims to forgive all federal and private student loans. Further, both graduate and undergraduate student debts will be included here. 
  • Bernie Sanders promises there will be no restriction to qualify for the forgiveness program. Regardless of factors such as the amount of loan, income, etc.
  • Bernie’s “free college plan” is expected to be financed by a new tax on Wall Street. So, there will be a little cost added to transactions that involve bonds, stocks, and more.

Frankly speaking, this plan is arguably the most radical proposal to student loans that have been suggested in the last decade. That is why, every citizen whose primary concern is related to repayment of their student loan, should seriously think of supporting Sanders.

What Should You Do Once The President Is Elected?

There are some factors you should take into account regarding the results of elections. First, the chances of Sanders being elected is not that high. So, you may not pretty much take the advantages that he proposes. Second, in case Bernie is elected, the earliest date that his free college plan can help you is the Summer of 2021. Therefore, if your debts are a headache for you at the moment, you should better check out other available options to mitigate your situation. We advise you to contact a student loan debt agency to find a solution for your current case. 

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How does Bernie’s Plan compare to Other Candidates’ Proposals?

Elizabeth Warren Student Loan Proposal

One of the best proposals in terms of student loans was provided by Elizabeth Warren. The main points of her plan regarding the student loans issue are:

  • Immediately erase a maximum of $50,000 for all dwelling in a household and with an annual earning of below $100,000
  • Would not require student loan forgiveness beneficiaries to pay taxes on the amount forgiven. So, they will incur zero cost during this process
  • A flexible loan debt relief of up to $50,000 to everyone living in a household with an earning of $100,000-$250,000
  • Benefits everyone regardless of federal or private student loan
  • The student loan debt proposal has suggestions to streamline the approval processes for current forgiveness programs such as PSLF, Disability Discharge, etc.

Now that we went through the basics of Senator Warren’s student loan debt plan, you should know that for the time it was submitted, this plan was revolutionary enough, too. But once Sanders offered his free college plan, all the eyes were on him. 

How Does Sanders’ Proposal Compare to Other Democrats’?

Bernie Sanders’ student debt relief plan has a lot of similarities to what Warren offered. The main difference is Elizabeth Warren excludes those making over $250,000 a year out of her student debt loan proposal. Differently, the former Vice President Joe Biden offers free two-year community college. It is worth mentioning that in 2015, Biden had proposed to make colleges free for four years. Another candidate for Democrats Amy Klobuchar supports the same proposal as Biden. Kirsten Gillibrand, the junior senator from New York, has supported many ideas in terms of student loan debt plans. Her ideas include that of Sanders’ that cancels tuition and fees for families living with an income below $125,000 a year. 

Naturally, other Democrats in the race could not close their eyes to arguably the biggest problem of students. South Bend Mayor Pete Buttigieg proposes a plan to eliminate college tuition fees and debts for families with low-income. For middle-income families, he offers to cancel college tuition fees only. On the other hand, candidate Eric Swalwell backs up a plan that will eliminate interest on federal student loans. Despite the fact that they do not neglect the student loan debt problem, it is clearly seen that no proposal comes closer to Bernie’s plan.

What Does Sanders’ “Free College Plan” Include?

We would have some good news for you if you thought Sanders’ plan was to eliminate only student loans. In fact, Bernie’s “free college plan” includes free higher education for everybody, too. 

Sanders proposed his “free college plan” a few years ago during his 2016 Election campaign. Going through his plan for then, we can easily notice that he aims to benefit students with his proposal. Even during his initial plan, he was offering to make fully tuition-free public schools, significantly diminished student loan debt and loan interest. Further, his creative solutions for the student loan problems included “fully funding” historically black schools, too. 

Surely after seeing Bernie Sanders’ student loan plan for 2020 elections, we understand that it is the best promise yet given by anyone on this evergreen topic. His proposal targets to end the student loan system. 

Another nuance I would like to put forward is I was expecting Sanders to propose such a plan that would overshadow that of Warren’s. It is nice to know that he positively surprised many, including me, with this new plan.

Six Main Points of Bernie’s Free College Plan

The proposal for students includes six main goals. All of these will significantly benefit students in terms of college expenses. Students will either see the advantage of this proposal through reduced tuition costs, or through reducing already accumulated debt. 

Here are the six main points of Bernie Sanders’ free college plan:

  • Cancel tuition fee at public universities and colleges
  • Put an end to federal Government’s profiting from student loans
  • Reduce interest rates on student loans
  • Allow people to refinance their student loan debt at historic small rates
  • Allow college students to access work-study programs and need-based financial support
  • Fund this plan through a new tax from Wall Street

One of the best parts of Bernie Sanders’ student loan forgiveness plan is it applies to all the population. If you have federal student loans to be repaid, you will benefit from this plan, too, in case Sanders becomes president. Since this is the most revolutionary student loan debt plan ever, I was, frankly speaking, doubtful about him keeping his promise. Nevertheless, Bernie once again proved that his words were not just some empty talk when his submission was out. I am glad to say that he indeed plans to erase the entire student loan debt that every American citizen possesses at the moment. 

Cancel Tuition Fee at Public Universities and Colleges

The idea of Bernie Sanders to make public universities and colleges tuition-free is not a new idea. In fact, it was first initiated by the German Government. The Germans started to implement this idea as they believed the tuition fee of $1300 annually demotivated some people to study in a college. 

Can you imagine if every American citizen would have to pay a $1300 yearly tuition fee, how much discretionary income they would have? In an economy fueled by consumer spendings, a lot of money would remain for other expenses such as transportation, housing, etc.

That said, we should inform you that Bernie Sanders’ student loan forgiveness proposal is practiced in some other countries, too. Scandinavian countries, such as Norway, Sweden, and Finland, have initiated this cost-free education practice, too. Even in Chile, education is expected to be free starting from this year.

Sanders asks if these countries can offer a fully-free education, what prevents the strongest state worldwide from doing the same? He is not wrong with his judgment.

Sanders’ official website says, “there was a time when some of the American universities and colleges used to be free.” A perfect example is the University of California – one of the most prominent US universities worldwide. Until the 1980s, studying in the top schools of this university was not requiring any tuition. But now, just because some bankers and corporations will get their pockets funneled with money, thousands of people are deprived of studying there. 

Arguably the best part of this tenet of Bernie Sanders’ student debt forgiveness plan, is ridiculous rules of federal student loan forgiveness programs would disappear. It means the future graduates would be free of building a mountain out of accumulated debt, which they would hope it will be forgiven in the future. 

Put an End to Federal Government’s Profiting from Student Loans

The Federal Government is expected to make a profit of $110 billion from federal student loans through the upcoming ten years. Sanders thinks this is both morally and economically incorrect. His free college plan offers to prevent the Federal Government from gaining profit from student loans. On top of that, Bernie is planning to use those already acquired profits to reduce interest rates on student loans substantially. 

There is no reason why the Government should make a profit from offering us something. We are anyway liable for taxes that fill the cash-box of the Government with tons of money every year. Considering that the money they get from taxation covers all their work, I think student loans are just a way of incremental income for them. 

Is the Government a private for-profit company? No, it is not. Then it should not act like one. The duty of the Government is not to make more money. If you carefully analyze, you will notice that the Government literally charges us for taxes and gives it back to us in the form of loans. I wonder why the Government does not remove the mediator (Federal Government) and allow us to finance the college costs without the incorporated expenses?

In case Sanders’ proposal was realized, we would immediately see its benefits on 40 million people who owe student loan debt. Equal division of $110 billion would diminish the debt burden of all these citizens by $2750. 

Do you recall the tax cut case of George W. Bush? But even that reformations had mainly benefited high-income households. Fortunately, the idea of Sanders will apply to all of us regardless of our income level. And the fact that it will go beyond $2750 cost reduction makes him more trustworthy. 

 

Reduce Interest Rates on Student Loans

As you can see, proposing $2750 is a one time aid to student debt holders. Senator Bernie Sanders understands it better than us. That is why he suggests cutting interest rates on student loans. Just imagine interest rates on every debt holders’ loan decrease. It means all of them will be able to manage to pay it and will be able to spend adequate amounts on other needs. 

To understand the situation better, let’s have a look at the student loan debt issue from another view. It is no secret that students are supposed to repay their loans for a longer period. Depending on the case, they may have to pay for 20 or even 30 years. From here, we can understand that the interest is their biggest enemy in terms of student loans. Do not forget that it keeps accumulating. It means if delayed due to any reason, students will have to pay more in total. Naturally, when divided by the number of payment terms, it will raise the payment they should make. Needless to say, among all the duties, the thought of being obligated to pay this debt for years will make them constantly distressed. 

The situation is even more distressing for those who cannot afford to pay back with their current income. As mentioned above, the most ruthless side of interest is they make the debt grow very quickly.

I do not see any better way other than Bernie Sanders’ student debt plan to relieve this situation. And I should say that I am not a radical supporter of Bernie Sanders. But observing what he is trying to do for people, I think everyone suffering from student loan issues should vote for him.

If you are also one of those people who should pay back way more than the taken amount, you should also seriously support Senator Sanders. Bear in mind that in case the idea of Sanders is executed in the law, fast-paced enhancing student loan debt can be a history. It means you may get rid of student debt you have taken years back.

 

Allow College Students to Access Work-study Programs and Need-based Financial Support

As you are already aware, interest rates are the leading cause of student loan problems. That is why I think this part of Senator Sanders is the most critical one. 

You may be surprised when you hear it, but now it is probably the best time ever to borrow money in the US. Do you know that 30-year mortgages are given with a 3% interest rate? Can you believe that Americans receive auto-loans with no interest rate? Now just imagine how much you would save on your monthly student loan debt payments if paid with such rates?

Federal student loans have an interest rate within the range of 5-7%. Compared to interest rates offered in other costly purchases, such as cars, these rates are substantially high. 

And when we go through the repayment plans for federal student loans, we come across with no trace of interest rates. All the aspects show how you can prolong your payback duration based on factors like income, etc. The worst part of this restructuring is the longer you will have to repay, the larger the total amount you will pay. And there is nothing in these repayment plans regarding the reduction of interest rates. 

I regret to say that the interest rate is the main decisive factor that affects your student loan payments. That is why only through its reduction, you can achieve relief in terms of monthly payments. 

Bernie Sanders’ student loan debt proposal will allow debtors to benefit from historically small interest rates to refinance their loans. So, in case monthly student loan payments are a headache for you, too, Sanders is the person you should back in the elections.

Allow People to Refinance Their Student Loan Debt at Historically Small Rates

It is the only idea of Senator Sanders that I question. I do not say it is not going to benefit students. But as a social democrat, how Bernie came up with this idea makes me curious. Because he aims to demand public universities and colleges to cover 100% of the financial needs of low-income students. I am okay and even support the idea of aiding those in need. But this part of the plan is vague. I wonder who is exactly considered the lowest-income students? Also, will the program apply to the lowest 5%, 10%, or something else? There is no information regarding these nuances. 

Honestly speaking, I support the idea of assisting low-income students with the payment of tuition fees as long as they are involved in some type of volunteering work. Yet my subjective view on supplying low-income students with literally every necessity just because they are poor, is not very positive. I believe they should earn this benefit by doing some kind of work. 

In general, this offer of Senator Sanders is very similar to the Public Service Loan Forgiveness (PSLF) plan of the federal student loan forgiveness program. And for me, PSLF is the best plan provided by the federal student loan forgiveness program. Here, graduates get the chance to gain work experience in the public sector. Compared to that, Sanders’ offer is even excellent. 

While PSLF is applicable for graduates only, the proposal of Bernie would apply to students. It means they will get real-life work experience even during studying years. As a result, students will already have hands-on experience when they graduate. On the other hand, corporations will be able to benefit from already experienced employees. In a nutshell, this practice will make our United States better off in the long term. 

Fund This Plan Through a New Tax from Wall Street

I, in particular, like this part of the proposal that Sanders is planning to finance the plan through a new tax from Wall Street speculators. Bear in mind that this tax expected to bring around $2.4 trillion from affluent investors through the next ten years. Bernie Sanders believes that this amount can be utilized to diminish the student loan debt and make the public colleges tuition-free. 

Senator Sanders is planning to impose 0.005% tax for derivatives, 0.1% for bonds, and 0.5% for stocks. On top of that, a $1,000 derivatives trade would face a tax of $0.05, and $1,000 stock trade would see $5 in terms of tax. 

The positive side of this tenet is the tax is aimed at huge banks and financial entities. That means mid-level investors will not be negatively affected by this trend. So, they will be able to leave their funds in the market to see it grow over the years.

Apply for Student Loan Forgiveness Help

If you struggle with university student loan forgiveness, then you should get help with that. Because the employees in these agencies are dealing with the student loans every day and they have enough experience for solving different kinds of student loan problems.

Buttigieg’s Thoughts on Sanders’ “Free College Plan”

One of Senator Sanders’ rivals, Buttigieg, is not very positive and hopeful about Bernie’s student loan debt plan. He thinks the children of wealthy Americans should not be treated the same way as low-income ones’. Buttigieg stated, “I believe we should move to make college affordable for everybody.” Just to remind you that his plan, if elected, is to make education free for families with an annual income of below $150,000. So, he believes families making over $150,00 per year can comfortably afford to send their children to colleges. Also, Buttigieg does not think millionaires should benefit from free college. 

Honestly, I am not against Buttigieg’s view on this topic. After all, he supports the idea of giving everyone quality education. But I do not see any reason why the children of millionaires should pay for higher education. If Senator Sanders gets elected and realizes his plan, then the only thing we should do is take our hats off. 

More Than 100 Academics Endorse Sanders’ Proposal

In June 2019, over 100 academics endorsed Senator Sanders’ “free college” and “debt cancellation” plan. The experts showed their primary concern as the “unimaginable 3.819%” increase in the annual cost of attending a 4-year public college through the last five decades. In the letter where academics endorsed Sanders’ plan, they also mention that the crisis of 2008 gradually affected the student loan debt problem on a large scale. As a supporter of Bernie Sanders’ student loan debt proposal, I cannot agree more with these academics. Especially, I endorse their idea of “We must treat education as the public good that is.” 

In my opinion, high-quality education should be presented to everybody regardless of their financial situation. By this, our colleges can produce many more brains with progressive ideas, which could help to boost our economy. And when we achieve growth in our economy, we can quickly accomplish the social welfare of the people of this great country. That is why I think the views that the “free college plan” of Senator Sanders will deteriorate our economy are biased.

Prominent Media Outlets’ Reactions to Sanders’ Proposal

I was not expecting popular media channels to support the revolutionary idea of Bernie Sanders. It turned out that I was right in my prediction. 

NPR, which is widely considered as a trustworthy source of information presented to Americans, did not praise Sanders’ idea. Well, I do not claim that they had to, but the point is they have missed the main idea behind Bernie Sanders’ student loan relief plan. In an article published in the summer of 2019, they state that Sanders’ plan is not likely to provide the USA with the most educated workforce. Senator Sanders is not looking forward to that. The motive behind his proposal is to help the younger generation get rid of the heavy burden of student debt so that they can have the life standard their parents once had. 

In the title of the same article, NPR has emphasized the sentence “Will it work?” referring to Bernie’s “free college plan.” The title itself indicates the prejudice towards Senator Sanders’ proposal. 

As mentioned above, the plan of Sanders includes assisting people with substantial student loan debt. Presenting it to the public in another way is nothing but an indecent deed for me. By this, people who are willing to support Sanders can be confused and get discouraged. In other words, articles from such reliable sources can change the minds of many who would vote for Sanders before.

CNN’s Reaction to Sanders’ Plan

I was not satisfied with the assessment of Sanders’ plan by CNN either. Just like NPR, they criticized Bernie Sanders’ student debt relief proposal. Instead of discussing the positive and negative aspects of the key tenets of Sanders’ plan, they focused on the Wall Street tax part.

CNN judges Bernie’s idea on the possibility of not being able to generate the expected amount of tax from Wall Street. But let’s assume that Sanders is unable to receive the expected tax amount from “Wolves of Wall Street.” At least he has given an idea that can change the lives of millions for once and all. And though similar ideas were presented during previous presidential elections eves, such a comprehensive and beneficial one was never there. 

I wonder why such huge media outlets ignore the potential benefits of this plan to the nation. Probably because of their strong relationship with the Richie-riches of Wall Street, they start to mistreat such proposals. 

What Does Media Misunderstand?

It seems that the main idea of Bernie Sanders’ student debt relief plan is what the media gets wrong. As it is crystal clear, what Sanders is trying to achieve is to help people with student loan debt issues. Unfortunately, the media focuses on side aspects of this initiative, such as the Wall Street tax plan. I think, instead of using their manipulative power to discourage such useful ideas for Americans, various media channels would better serve their country by promoting what is best for them. In short, I do not see their views on this matter as something appreciative.

Conclusion

Bernie Sanders’ “free college plan” is an exceptional proposal for our nation. I am especially excited about the interest rate reduction part of this initiative. If Senator Sanders is elected, I believe this step will be the first of many more that will drive American society to better days. 

Frankly speaking, the only side Bernie Sanders’ student loan debt relief plan lacks is regarding private student loan burden. In my opinion, he should not give the cold shoulder to those with private student loan debts. Indeed, to my way of comprehension, people with private student loan burdens are the ones that need more help. No doubt that his current plan happens once in a blue moon, too. But incorporating the problem of the segment with private loans would make this plan perfect. Still, as the one who has offered the best ever plan during the history of elections, I believe we should all support him for the common good of our land.

In this post, I explained the nuts and bolts of Bernie Sanders’ “free college plan” of Bernie Sanders. I hope it answered many questions and unclear points in your mind. To be aware of more related topics, you can check out our page.