Three US lawmakers unveil plan to cancel student debt

Washington: Senator Bernie Sanders, Rep Pramila Jayapal, and Rep Ilhan Omar unveiled a landmark proposal to eliminate all student debt in the US.

The plan to eliminate student debt is part of the proposed College for All Act, would have no eligibility requirements and would apply to undergraduate and graduate student loans. According to Sanders, it would be paid for by taxing Wall Street stock and bond trades.

The act has the ambitious aim of not just ending student loan debt but also of making all public four-year colleges and universities in addition to community colleges, trade schools, and apprenticeship programs tuition-free for all.

“This is truly a revolutionary proposal which accomplishes three major goals,” added Sanders. “First, in a highly competitive global economy, it makes certain that all Americans, regardless of income, can get the college education or job training they need to secure decent paying jobs by making public colleges, universities and trade schools tuition-free and debt-free.”

“Second, in a generation hard hit by the Wall Street crash of 2008,” Sanders said, “it cancels all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the ‘crime’ of getting a college education. Third, it pays for these proposals by implementing a tax on Wall Street speculators. In 2008, the American people bailed out Wall Street. Now, it is Wall Street's turn to help the middle class and working class of this country.”

“There is a crisis in higher education at a time when a post-secondary degree is more important than ever,” said Jayapal. “A college degree should be a right for all, not a privilege for the few."

She added, "I am so proud to stand with my colleagues and introduce this bold package of legislation to reinvest in our nation’s future. We are committed to restoring freedom to students, workers and families – freedom from the student debt that is holding them back.”

“There are currently 45 million Americans with student debt,” said Omar. “That’s 45 million people who are being held back from purchasing their first home; 45 million people who may feel that they can’t start a family; 45 million people who have dreams of opening a business or going into public service, but are held back.”

“My bill would end this crisis by cancelling all $1.6 trillion in student loan debt,” Omar said. “This would not only allow Americans struggling with debt pursue their dreams, but would unleash billions of dollars in economic growth—stimulating our entire economy. We can fully fund this with a small tax on Wall Street speculation. The American people bailed out Wall Street. It’s time for Wall Street to bail out American people.”

As part of the plan, the legislation would provide $47 billion a year to states to eliminate undergraduate tuition and fees at public colleges and universities.

To qualify for the federal funding, states would be required to meet a number of requirements designed to protect students, ensure quality and reduce costs. Currently total tuition at public colleges and universities amounts to around 70 billion a year. Under the college for all act the federal government would cover 67 percent of the cost, while states would cover the remaining 33 percent.

According to the proposal, no funding from the program would be used to fund administrator salaries, merit-based financial aid, or the construction of non-academic buildings such as stadiums.

The proposal states that the reforms would be paid for by a Robin Hood Tax on Wall Street. The legislation would impose a Wall Street speculation fee on investment houses, hedge funds, and other speculations of 0.5 percent on stock trades (50 cents for every $100 worth of stock) a 0.1 percent fee on bonds, and a 0.005 percent fee on derivatives.