Democratic presidential candidate Elizabeth Warren vowed to apply executive authority to terminate the greater part of student loan debt her first day in office if selected this November. The pledge to go around Congress on a subject that Republicans – and even some Democrats – don’t support sets the senator from Massachusetts apart from even her closest progressive rival, Sen. Bernie Sanders of Vermont, and comes ahead of a critical debate just weeks before the Feb. 3 Iowa caucuses.
Elizabeth Warren pledges to terminate student loan debt
Elizabeth Warren stated in a proposal posted to Medium that the Department of Education already has the extensive legal authority to terminate student debt, and we can’t afford to await Congress to take action. “So I will begin to use existing laws on day 1 of my presidency to implement my student loan debt cancellation plan that offers relief to forty-two million Americans – in addition to using all available tools to address racial disparities in higher education, crackdown on for-profit institutions, and eliminate predatory lending.”
Free college and the termination of student loan debt have appeared as the higher education darlings among the most progressive Democratic presidential candidates – though the policies haven’t got the support of the whole primary field or even the greater part of it. While every candidate’s higher education stage focuses on college affordability and federal student loan refinancing, only Sanders and Warren have embraced a tuition-free model for all public 2-year and 4-year colleges and the wide-scale exclusion of student loan debt.
Warren’s plan would abolish undergraduate tuition and fees at public colleges and universities, in addition to erase student loan debt for 95% of borrowers. The tiered plan would terminate $50,000 in debt for every person with a household income under $100,000 and “substantial debt cancellation” for every person with household income between $100,000 and $250,000.
The $1.25 trillion price label to do so would be equalized by her signature “Ultra Millionaire Tax,” which applies to households with a net worth of $50 million or more, approximately the wealthiest 75,000 families, or the top 0.1%, in the country. Some, counting Democratic contenders Sen. Amy Klobuchar of Minnesota and former South Bend, Indiana, Mayor Pete Buttigieg, have shied away from extensive removal of student loan obligation.
Buttigieg stated in December’s debate that he very much agrees with Sen. Even ex-Vice President Joe Biden‘s higher education platform consists of removing student loan debt only for people making $30,000 or less.
In place of free college and the cancellation of debt for all, most of the field is paying attention to targeting those policies on the poorest students, severely growing Pell Grants – the federal tuition assistance program for low-income families – letting borrowers to refinance their loans and setting up a loan forgiveness program for students who go into public service careers. There’s also a major focus on traditionally black colleges and universities and other minority-serving institutions. Almost all the candidates have promised billions in increased funds for the schools.
Elizabeth Warren obligates to use Executive Authority
Elizabeth Warren, in drawing a bright line between herself and the rest of the Democratic field, wrote that on Day One of her presidency she would direct the education secretary to “begin to compromise and modify” federal student loans to terminate up to $50,000 in debt for 95% of student loan borrowers, or about 42 million people.
Elizabeth Warren stated that the student debt crisis is deeper than many experts thought was possible. “The Department of Education has extensive authority to end that disaster. When I am president, I plan to use that authority.” Warren’s new plan for executive action would need the Education Department to radically expand its explanation of the power it has to eliminate federal student loans under the Higher Education Act.
The Education Department has long had the control to “compromise” or waive student loan debt. Still, it has generally done so only in limited cases to cancel or settle the debts of defaulted borrowers who are doubtful to pay back.
Earlier proposals for executive action on student loans have also been constricted. For example, in 2016, Hillary Clinton’s campaign promised that she would use executive action to provide all federal student loan borrowers a 3-month official pardon from having to pay their student loans.
Warren has long pushed the Education Department to more widely interpret its powers to offer debt relief to student loan borrowers. She pressured the Obama administration to terminate the debts of students who attended Corinthian Colleges, a huge for-profit college chain that distorted amid allegations of fraud.
Warren’s movement pointed to a new legal analysis by Harvard Law School’s Project on Predatory Student Lending that backed her disagreement that the Education Department already has the authority to give mass cancellations of federal student loans. Extensive student loan debt relief is “lawful and permissible use of the authority Congress has conferred on the Secretary of Education,” the group stated in a 6-page analysis of Warren’s plan.
Beyond full student loan forgiveness, Warren’s plan also outlined other executive actions she would take to advance her higher education priorities without congressional action. Additionally, Warren said that she would bring back many of the Obama-era regulations cracking down on for-profit colleges that the Trump administration has canceled or scaled back. She said she would stiffen IRS rules for for-profit colleges seeking to convert to non-profit entities, which critics see as a tactic to avoid federal regulations.
Warren also promised to go for what she called “predatory financial products” in higher education, saying she would prioritize investigations into the rising “income-share agreement” industry “for violations of federal civil rights and consumer protection laws.”
Income-share agreements are contracts under which an investor gives funding to students to cover tuition in exchange for an obligation that they pay back with a percentage of their future earnings. Critics like Warren have said they’re worried that they don’t provide students with sufficient legal protections.