https://www.msn.com/en-us/money/pers...es/ar-BB10sWHp
Bernie Sanders’s plan to wipe out Americans’ $1.6 trillion in student debt could face thorny political and practical problems if he is elected president in November.
The Vermont senator, an Independent who has surged to the top of the national polls in the Democratic presidential primary, has drawn little congressional support for his plan. A bill he introduced with Rep. Ilhan Omar (D., Minn.) last summer has just a dozen co-sponsors, all in the Democratic-controlled House, where it has languished.
A majority of Americans, 57%, oppose canceling all student debt, according to a September 2019 Wall Street Journal/NBC News poll. Among the strongest opponents are groups Democrats hope to peel away from President Trump: Rust Belt voters, independents, whites, men and voters in rural areas.
Mr. Sanders has said his plan would free up money for young adults to buy homes and cars, stirring economic growth. “It is not merely immoral to doom an entire generation to endless educational debt—it is also bad for our economy,” Mr. Sanders wrote in an op-ed for Fortune.
More than 43 million Americans owe student debt, which has quadrupled since 2005 and is now the second-highest form of household debt, after mortgages, according to the Federal Reserve Bank of New York. More than 90% of all student debt was originated or guaranteed by the federal government. The rest—about $123 billion—was originated by private banks without a government guarantee, according to MeasureOne, an analytics firm.
Mr. Sanders proposes to pay for the debt-forgiveness effort with a new tax on financial transactions. Progressive Democrats in Congress introduced a bill last year to impose a 0.1% tax on deals such as stock purchases and derivatives trades. The idea has gained momentum in recent years as progressives seek higher taxes on the financial sector, but Republicans generally oppose the levy.
Another Democratic presidential primary contender, Sen. Elizabeth Warren (D., Mass.), has said she would use executive powers to sidestep Congress and cancel up to $640 billion in student debt. A Sanders campaign spokesman said Mr. Sanders hasn’t studied such a move but would look into the possibility.
Mr. Sanders has proposed wiping out all student loans, federal or private. His proposal would authorize the U.S. Education Department to buy and cancel student loans from private lenders, covering any interest due and late charges.
Beneficiaries would include borrowers who have refinanced their federal loans through lenders such as Social Finance Inc., or who got loans from nongovernment lenders such as SLM Corp.’s Sallie Mae and Wells Fargo & Co. Parents who borrowed through federal or private student-loan programs would benefit, but not those who borrowed money against other assets—such as through a home-equity line of credit—to cover educational costs.
Mr. Sanders’s plan also would help many well-off borrowers, including workers with graduate degrees and those who attended elite private colleges. Graduate-school debt accounts for roughly 40% of all student debt.
Most borrowers in default owe relatively little—less than $10,000—typically because they dropped out of college or because they attended short-duration trade programs.
Mr. Sanders has said he believes education is a societal obligation and any benefit should be universal.
Supporters of debt cancellation say millions of borrowers attended schools of dubious quality, or were swindled by recruiters with deceptive pitches, and shouldn’t have to repay their debt.
The WSJ/NBC News poll showed that among Democrats, 63% favor the plan, while 34% oppose it.
Mr. Sanders’s plan is designed to appeal to voters such as Chelsea Moore, a 29-year-old accountant in Lexington, Ky., who leans Democratic and owes $74,000 in student debt from graduate school at Syracuse University.
Ms. Moore, who hasn’t decided whom she will support for president, shares a 372-square-foot apartment with her boyfriend and their dog, Keto, so that she can keep up on her student-loan payments. She plans to pay off her loans within four years.
Ms. Moore says she has reservations about Mr. Sanders’s plan because it wouldn’t be fair to borrowers who have already repaid their loans. She said she would consider it if he also pushed to end the federal student loan program. “It won’t be fair to those after me who incur more loans,” she said. “What are we going to do, run a forgiveness program every 20 years?”
Tonya James, 33, a senior analyst for a securities firm in Buffalo, N.Y., strongly supports Mr. Sanders’s plan, which she said would allow her to spend more on child care and other purchases. She has repaid about $30,000 in student loans she borrowed for college and graduate school, and still owes $36,000.
The mother of two children said, “My generation is severely underwater by policies that are not favorable to growth.”
Mr. Sanders has called for maintaining the government loan program, but in a limited role. He says he would limit Americans’ reliance on student debt by making public college tuition-free, boosting scholarship money for poor students, capping the interest rate on new student loans at 1.88% and expanding a program that forgives debt for borrowers who go into public-service jobs.
Some students would still need to take out federal loans to cover living expenses at public colleges and tuition at private colleges and graduate school.
Tom Baslee, 76, a self-described “yellow dog” Democrat, hates Mr. Sanders’s idea. The Missouri resident spent two years in the Army and a career delivering letters for the U.S. Postal Service. The savings he scrounged together helped put a daughter through college.
Forgive other people’s student debt? “That’s crazy,” says Mr. Baslee, of Boonville. “I wouldn’t mind trying to get some public service out of these people to help cancel the debt. But if it’s just giving them a free ride, I don’t believe in that.”
Bolshevik Bernie wants to spend trillions - and buying the votes of folks with student debt is part of his plan - the question is - that Bernie won't answer - how much does it cost, how will he pay for it- and how long does this go on???
a great deal of the debt is i the hands of "capitalist" organizations - tht would profit from the buyout - has Bernie considered that????
And once started, a pay-off the debt program must inevitably be continued to crate free college for all time to all colleges. And how expensive is that - and how many Billionairs are there in the US to pay for all of Bernie's Vote Buying.
Bolshevik Bernie - Communist and shameless Vote Buyer.
When the American public trets the Treasury as its purse - representative democracy is doomed.
Now for all the responses from the the terribly insecure Fascist DPST's who want Bernie to "Take care" of them, and satiate their insatiable desire for security from all risks in Life.
Sanders Plan to Wipe Out Student Debt Faces Hurdles
