His latest project – a proposal that, according to the analysis of his campaign, would remove $ 640 billion of student loans currently held by the government and would make tuition fees largely free for public institutions of two or four years – seek to address inequities, remove financial barriers to university education and ease the burden of debt on those who have already gone to school. The Massachusetts Democrat would fund all this with an income tax of more than $ 50 million. It's also like that that she pays her universal pre-K proposal.
Other candidates for the Democratic nomination plan to make the university more affordable. Cory Booker would give each child a nest egg, funding those of low-income children to a higher level, and Bernie Sanders has already proposed a grant program for tuition fees.
But Warren's proposal has sparked a new interest in the subject, although it seems unlikely that anything of this magnitude will happen in the Senate; Majority leader Mitch McConnell, a Republican from Kentucky, has vowed to be a "great reaper" for progressive projects.
Warren's proposal received praise, but also a quick response on social media. Some wondered if it was right to help current and future borrowers, while many other people have already paid off their loan without any help of this type.
But that certainly goes in the direction of a new wave of democratic proposals to radically change what the government provides to the Americans.
Is it a crisis?
There is a bipartisan agreement that something has to be done about student loans, albeit for different reasons. Americans now have more debt in student loans than in auto loans or credit cards. Unlike credit cards or car loans, however, a university education makes its future income.
Warren sees a crisis in student loans because they weigh on borrowers, perhaps for decades after they finish their studies. She said under her administration, student loan debt, as well as climate change and gun violence, would be considered a national emergency. Conservatives like Education Secretary Betsy DeVos have called the crisis crisis student loans because they account for a considerable share of the US balance sheet.
The federal government essentially took over the student loan industry in 2010, when it became the lender of student loans guaranteed by the federal government. He currently holds more than $ 1 trillion in student debt. In fact, student loan debt is the main asset of the federal government, according to the annual report of the Treasury Department.
But according to several reports from the Government Accountability Office and the Congressional Budget Office, it does not make a ton of this investment, especially since students can now link the repayment of their loan with their income and extend the terms of their loan .
More people are borrowing more money
Student debt has become a national concern in a very short time.
A A study by the Federal Reserve Bank of New York on household debt published in March found that student debt was a bigger part of Americans' personal balance sheets than credit cards or auto loans. According to the report, home loans are still below average, but more and more people are borrowing for university, borrowing more and taking longer to repay. The number of borrowers increased from 2.5 million to more than 4 million between 2005 and 2015 and the average amount borrowed increased from $ 20,000 to nearly $ 35,000.
The growth of the loan was compounded by the Great Recession, when many unemployed Americans returned to school.
More debt changes the lives of Americans
A separate report from the Fed, released in January and quoted by Warren when she announced her plan, asserted that there was a direct correlation between a decline in property among young Americans after the Great Recession and an increase in student debt.
It was also the moment when breathtaking states slashed funding for state-funded colleges and universities. According to the Center on Budget and Policy Priorities, a progressive think tank, most states have not returned to spending on higher education before the recession. This lack of government funding and rising costs have been passed on to students.
"The federal government's position is:" Good luck to you, you're alone, "said Warren Monday at CNN's town hall." The only thing they've done, is that # They lent dozens, hundreds of thousands, billions, billions of dollars to our students. And that crushes them now. So, my proposal is to say … it's not right. "
Who borrows money?
Student loans are disproportionately felt in minority communities and among low-income Americans. According to the Center's Report on Political and Budgetary Priorities, in the 2012 cited data, more than three-quarters of last-quarter income students had a student loan, compared to just over half of students in the top quarter of university. families. wise. More than 80% of African American public school graduates had taken out a loan, far more than the 64% of the total number of students.
First-generation students are more likely to fall behind in their payments, according to the Fed in 2016 – 11%, compared with 5% of those whose parents went to university. Only 5% of white students borrowing for their own education will be late, compared to 14% of African-American students and 27% of Latino students.
The more moderate Democrats who ran for president did not let Warren overrule him, but they recognized the need to do something else.
Sen. Amy Klobuchar of Minnesota opposes a free education program like Warren's, but said Monday night at CNN City Hall: "I really want to do something about student loans," to allow people to refinance loans at about 3% interest, less than what the government has requested in recent years.
Mayor Pete Buttigieg, of South Bend, in Indiana, said that he was still doing the math.
The counter-argument
Not everyone agrees that there is a paralyzing student loan crisis in the same harsh terms as Warren.
"My main objection to what Warren has proposed is to spend a lot of money on people who probably do not need it," said Beth Akers, senior researcher at the Manhattan Institute, a think tank that promotes free market ideas. She argued that even with Warren's $ 250,000 cap on any type of loan waiver, the plan would give a lot to people who repay their loan very well.
It is clear that some people will need help repaying their loans, but the government has already put these systems in place, she said.
"Often we are talking about the Warren Plan versus this imaginary status quo where student loans are a crushing and inescapable burden, whereas in reality we have a very strong safety net for borrowers who binds payments to theirs are eligible for forgiveness if they have low income over a long period of time, "she said.
DeVos has proposed removing items from these programs each year from the Trump administration.
Charts by JoElla Carman, CNN.
