(CN) — On the morning of the last Democratic debate before the Iowa caucuses, presidential hopeful Elizabeth Warren released a new plan to erase student loan debt without the help of Congress.
On the first day of her hoped presidency, Warren said she would direct her secretary of education to erase up to $50,000 in debt for 95% of student loan borrowers by compromising and modifying federal student loans. She’d also order the secretary to tackle for-profit colleges, predatory lending and racial disparities in higher education.
America’s student-loan crisis has held back an entire generation, Warren argued. It’s slowing home-ownership rates, preventing people from starting businesses or even staying in school in the first place, and contributing to rural “brain drain” as Millennials flee to cities. Student loan debt is particularly hard on black and Latino communities, she added, noting that these groups see higher rates of default.
“For decades, students have worked hard and played by the rules,” she said in a post to her website Tuesday. “They took on loans on the promise that a college education would justify their debt and provide a ticket to the middle class. But our country’s experiment with debt-financed education went terribly wrong: instead of getting ahead, millions of student loan borrowers are barely treading water.”
Warren released her initial plan to cancel student loan debt in April 2019 but said Tuesday she realizes the country cannot afford to wait for Congress. Now if elected, she said, she would use her executive authority to get it done.
After the initial debt cancellation, Warren will push Congress to act on the rest of the plan, including by initiating her now-famous wealth tax to bring down the cost of college.
Warren has no doubts about the legality of her new tactic.
“But let’s be clear: our government has cleared far bigger hurdles to meet the needs of big businesses when they came looking for bailouts, tax giveaways, and other concessions,” she wrote. “Instead of catering to the needs of the powerful and wealthy, a Warren administration will make the system work for the millions of Americans who worked hard to get an education, only to be trapped in debt.”