Elizabeth Warren Wants to Start Erasing Student Debt on Her First Day in the White House
WASHINGTON — Sen. Elizabeth Warren (D-Mass.) has already pledged that, if elected president, she would erase student-loan debt for the vast majority of the 45 million borrowers in America. On Tuesday, she went one step further, saying she would use executive authority to begin wiping out student debt on the first day of a Warren presidency.
She appears to be the first 2020 presidential candidate to have a day-one plan to use presidential executive authority on student-debt relief. In all, borrowers currently hold more than $1.5 trillion in student-loan debt in this country, a slow-motion crisis that economists say dampens home purchases, starting new businesses, saving for retirement, and even getting married.
Warren’s new plan says the Department of Education has the authority to “modify, compromise, waive, or release” student loans under the nation’s flagship law for colleges and universities, the Higher Education Act. This authority, Warren’s plan says, “provides a safety valve for federal student loan programs, letting the Department of Education use its discretion to wipe away loans even when they do not meet the eligibility criteria for more specific cancellation programs.”
Right now, federal student loans managed by the Education Department comprise roughly $9 out of every $10 in total student debt. On the first day of her presidency, Warren says she’d direct the Education Department to begin reducing or eliminating huge swaths of that debt to meet her ultimate goal of canceling up to $50,000 in student-loan debt for an estimated 42 million people who qualify for relief under her agenda.
Her plan also calls for clearing out the backlog of debt-relief requests for people who qualified for existing programs, like those whose college closed or defrauded them. A Warren administration would also recommit to the Public Service Loan Forgiveness program, an Obama-era initiative that eliminates student-loan debt for borrowers who work in the public sector or certain nonprofits for a period of 10 years. As the first wave of qualified students has come forward, the program has faltered under the Trump administration and left borrowers uncertain if they’d get debt relief or not. Warren estimates that the additional changes she wants to make could lead to debt relief for an additional 1.75 million borrowers.
Warren’s latest announcement, as well as her broader student-debt relief agenda, zeroes in the racial disparities found in the nearly $1.5 trillion in cumulative student debt in this country. Black and Latino students borrow at higher rates and default at higher rates than white borrowers do. According to data from Brandeis University’s Institute on Assets and Social Policy cited by Warren, the median black borrower carries $18,600 in debt 20 years after starting college; the number for the median white borrower is just $1,000.
Warren says she’ll direct the Education Department to open a “wide-scale investigation” into how colleges, public higher-ed systems, and student lenders contribute to racial disparities. She also pledges to put back in place regulations on predatory for-profit colleges that were removed by Trump’s education secretary, Betsy DeVos, and to revamp the office of the student loan ombudsman at the Consumer Financial Protection Bureau that has lost its clout under the Trump administration.
“This is more than just waving a magic wand and making debt disappear,” tweeted Mike Pierce, the policy director of the Student Borrower Protection Center, an advocacy group launched by a former Consumer Financial Protection Bureau student-loan ombudsman. Warren “has a serious, thoughtful plan to go through the federal portfolio chunk by chunk and cancel debt for tens of millions of people—beginning on day one.”