How Student Debt Forgiveness Reveals The Difference Between Bernie Sanders And Elizabeth Warren

The two 2020 candidates have big plans for student debt. The details of those plans show how differently they approach policy.

When Elizabeth Warren broke from the Democratic field in April to announce a sweeping student loan forgiveness plan, she advertised a calculator on her website that allowed people to enter their income and debt load and see how much debt forgiveness they could receive.

Now, Bernie Sanders has a calculator, too. It asks, “How much student debt would you owe under a Bernie Sanders presidency?” But no matter what your debt burden is, Sanders’ calculator always spits out the same number: $0.

Sanders and Warren both want to wipe out billions of dollars of student loan debt, and they want to pay for it with a tax on the country’s wealthiest 1 percent. But there is a deliberate divide between the Democratic presidential field’s two most prominent progressives over who should get student debt forgiveness, and how much people should be entitled to — one that exemplifies some of the most striking differences between the candidates.

Sanders’ vision, announced Monday, is relatively straightforward: wipe out every dollar of student loan debt owned by every American. All $1.6 trillion of it, gone.

The $640 billion Warren plan, by contrast, would cap student loan forgiveness at $50,000 for those making less than $100,000 annually, and at smaller amounts for those making less than $250,000. Unlike Sanders’ plan, those making more than $250,000 a year wouldn’t see a penny of forgiveness. Both plans would be paid for by asking more of the wealthiest Americans — Warren’s with a tax on individual wealth, and Sanders’ with a tax on Wall Street transactions.

Sanders and Warren have often been seen as ideologically linked, standing far to the left of many other Democrats in favor of policies that target the wealthy and corporations and dramatically increase the social safety net. But as they vie for the Democratic nomination, they have distinguished themselves from one another.

Warren has carved out a space for herself as a detailed policy wonk who is more palatable to moderates than Sanders, a self-described democratic socialist. And Sanders has favored sweeping, easy-to-understand plans that are at the vanguard of the party’s most progressive wing — presenting himself as unbowed to the concerns of centrists.

Their visions for student loan forgiveness fit that mold.

Warren’s plan tries to take into account a slew of long-standing criticisms of sweeping student debt cancellation. Mass loan forgiveness, critics have said, amounts to a handout to the wealthy, who are more likely to go to college, especially expensive private colleges. And they have argued that a broad plan would subsidize people with graduate degrees, like lawyers and doctors, who borrow much higher sums to attend school.

By keeping forgiveness to $50,000, Warren would tip the scales away from wealthier graduate student borrowers and lock the wealthiest Americans out of the benefit.

Jason Delisle, a fellow at the conservative American Enterprise Institute, said Warren’s plan was “certainly more palatable” than Sanders’ carte blanche forgiveness, though he still says there’s much to criticize, logistically and philosophically, about Warren’s plan.

Under Warren, “We know we aren’t going to be forgiving a well-paid doctor’s student loans,” Delisle said. “She’s done something to prevent the most extreme, ridiculous instances of people having their loans forgiven, the things that everyone would agree would be unfair. And Sanders doesn’t seem to do that.”

Sanders, for his part, shrugged off those kinds of criticisms at a press conference Monday, arguing that a single sweeping policy would act as a “bailout” for young people burdened by student debt. Total and complete student loan forgiveness has long been a rallying cry of the far left, who see it as an infusion of cash into the economy, spurring home-buying and spending for a generation that has struggled with soaring college costs.

“I believe in universality,” Sanders said. “And that means that if Donald Trump wants to send his grandchildren to a public school, he has the right to do that. Our response to making sure that this does not benefit the wealthy is in other areas, where we are going to demand that the wealthy and large corporations start paying their fair share of taxes.”

The differences between Sanders’ and Warren’s plans show “what they’re trying to project their image as being,” said Matthew Bruenig, president of the People's Policy Project, a progressive think tank.

“Warren is sensitive to the point, which is correct, that if you look at the data, people with higher incomes have higher debt,” Bruenig said. Her policy is “a gesture towards people who are aware — making [her] seem more serious, more wonky. That’s her brand, her image.”

Warren worked with higher education experts to model different plans, her campaign said, choosing an approach that experts said would close the racial wealth gap while still providing some forgiveness to 95% of Americans.

But an analysis found that Warren’s plan would still disproportionately help upper-income households, concentrating half of the $640 billion she offers in debt forgiveness among those in the top 40% of the income distribution. And it would still, by definition, benefit only those who have gone to college — cutting out a huge swath of the population who also tend to have lower incomes than those with some college education.

Sandy Baum of the Urban Institute, a longtime critic of total student debt forgiveness, said she “wasn’t happy” with Warren’s plan — saying it amounted to a “big gift for a select group of people — and the people who would get nothing from it are those who never went to college.”

Still, Baum said, “At least it has incomes, at least it has a limit on how much they’ll forgive. Sanders is more extreme.”

Sanders’ emphasis on universality and big sweeping ideas and Warren’s tendency to focus on details and nuance shows up across their campaigns.

Sanders has favored other universal plans that make few compromises — like Medicare for All, a single-payer government health care plan that he has said is the only way to fix the broken American health care system. Warren has also backed Medicare for All, but less full-throatedly, signaling she is open to other, more incremental solutions, like keeping private insurance but creating a public option to buy into Medicare.

Sanders announced the student debt plan alongside some of Congress’s most left-leaning voices, like Reps. Alexandria Ocasio-Cortez and Ilhan Omar, who are co-sponsoring the bill in the House. But few other Congressional Democrats support his $1.6 trillion plan.

A senior Sanders aide said that wasn’t an issue for the Vermont senator, who has often found himself far outside the political mainstream. “When Bernie introduced his free college for all plan in 2015, it had zero co-sponsors,” the advisor said. “Since then, you’ve seen so many people come out for it.”

Warren’s bill capping forgiveness at $50,000 is co-sponsored by Rep. Jim Clyburn, a more moderate Democrat who is part of the party’s leadership. But it also has yet to pick up any Senate sponsors, and other Democratic presidential candidates have not backed it.

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