Elizabeth Warren’s plan for student loan debt cancellation and free college tuition – costing $1.25 trillion over 10 years – does little to address two major education issues, according to one critic.
Brian Brenberg, associate professor and chair of the program in business and finance at the King’s College in New York, said Warren’s plan contains “big problems” during an appearance on “Fox and Friends” on Tuesday morning.
“One of the big problems is costs here. We are talking about trillions of dollars,” he said. “She wants to forgive loans for people who have loans now. She is not talking about folks who paid their loans off in the past and sitting there and thinking what a chump I am that I paid off my loans. That's a big problem.”
"She is not talking about folks who paid their loans off in the past and sitting there and thinking what a chump I am that I paid off my loans. That's a big problem.”
Under Warren’s plan, unveiled on Monday, each person’s student debt would get a relief of $50,000 if household income is up to $100,000. Higher incomes would also be entitled to massive debt reductions, while only those households with earnings of over $250,000 would get no student debt reduction.
But Brenberg points that while Warren’s proposal attempts to tackle the issue of massive student loan debts, it does little to address the real problem of what causes so many graduates to remain indebted for years, which is the quality of education.
“She is also not talking about the value people get from schools. So, yeah, people have a lot of loans. $1.5 trillion in loans,” Brenberg said.
“But the problem is they are not getting value for their education which is why they can't pay off those loans. Let's talk about that. She doesn't want to hold the universities accountable.”
But the problem is they are not getting value for their education which is why they can't pay off those loans. Let's talk about that. She doesn't want to hold the universities accountable.”
According to the details provided by Warren, her student debt cancelation plan has a one-off price tag of $640 billion to the government.
But Warren’s proposal also proposes to eliminate tuition and fees for two and four-year public college degree programs, as well as a $100 billion investment in Pell Grants, a federal aid program that requires no payback – bringing the total price tag of about $1.25 trillion over 10 years.
She claims that the cost of the policy, in addition to her proposed universal free college, would be “be “more than covered by my Ultra-Millionaire Tax -- a 2% annual tax on the 75,000 families with $50 million or more in wealth.”