Elizabeth Warren Says She Would Eliminate Student Debt On Day 1 Of Her Presidency

The Democratic candidate had released a plan to wipe out student debt for most borrowers. Now she's saying how she would do it on her first day in office.

Sen. Elizabeth Warren (D-Mass.) has said that she would wipe out student loan debt for a vast majority of the nation’s borrowers. On Tuesday, she unveiled a plan to do it starting day one of her presidency. 

Warren’s plan posits that existing laws give the Department of Education broad, though currently neglected, power to cancel student loan debt through the Higher Education Act. The plan says Warren would immediately order her secretary of education to take advantage of these rules. 

Lawyers at the Project on Predatory Student Lending confirm the legality in a letter released with the plan, writing that through the Higher Education Act, Congress gave the secretary of education power to “create and to cancel or modify debt owed under federal student loan programs.” 

“That provision empowers the Secretary to execute the broad debt cancellation plan you have proposed,” the lawyers wrote. 

Democratic presidential candidate Elizabeth Warren at a campaign event at Brooklyn's Kings Theatre in New York on Jan. 7.
Democratic presidential candidate Elizabeth Warren at a campaign event at Brooklyn's Kings Theatre in New York on Jan. 7.

In April, Warren announced her intention to cancel up to $50,000 in debt for 42 million people ― or 95% of borrowers. In July, she introduced a bill to do so. But her latest proposal says that she doesn’t have time to wait for Congress to act and that she will wipe out up to $50,000 in debt for anyone with a household income below $100,000, providing additional relief for households making up to $250,000. She pledged to “amend any regulations or policy positions necessary to get there.” 

Warren noted that this has been a central issue for her since joining Congress in 2012. 

“Along the way, I learned two key things. First, the student debt crisis is deeper than many experts thought was possible. And second, the Department of Education has broad authority to end that crisis,” Warren wrote. 

There are already a number of programs that work to provide relief to students who have been defrauded or who work in public service after graduation. But under the Trump administration, Secretary of Education Betsy DeVos has worked to significantly roll back the level of relief provided ― while facing numerous legal challenges to her efforts

Warren has promised to fully utilize these programs while simplifying the application processes that allow borrowers to apply for relief. She would also reach out to let borrowers know about their options. 

On the political side of things, Warren pledged to keep fighting for free public college, increase funding for historically black colleges and universities, and expand eligibility for Pell Grants, which help low-income students pay for college. Her plans would be paid for by enacting a wealth tax for households with a net worth of more than $50 million. 

Warren frames the plan as one of not only economic justice but also racial justice, citing statistics that black students borrow more money and end up defaulting on their loans more often. Black students also more often have racked up student debt from attending predatory for-profit colleges. 

“If we want to achieve the kind of big, structural changes that will make our education system, our economy, and our society work for everyone, we’re going to need to use every tool, every scrap of opportunity that comes our way, to help working families,” says the plan. 

Warren’s Democratic rivals in the presidential race have also promised to tackle this issue, with varying levels of ambition. 

Sen. Bernie Sanders (I-Vt.) has promised to wipe out all existing student debt ― unlike Warren, who caps such relief by income. His plan does not address specifically how he would go about it. 

Vice President Joe Biden has also addressed the issue ― albeit his plan is less ambitious ― promising to enroll individuals with loans in an income-based repayment program. Through Biden’s plan, those making less than $25,000 per year would be relieved of payments on undergraduate loans. Everyone else would have to contribute 5% of their discretionary income toward repayment.