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Students leaving college with their hard-earned degrees also have a significant and growing amount of debt. Which Democratic candidate’s plan is the most effective at addressing this growing problem?

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JACQUELINE LUQMAN: This is Jacqueline Luqman with The Real News Network. Student loan debt has become a central issue in the current political climate and political debates.

SENATOR ELIZABETH WARREN: My plan has universal tuition-free college for all of our kids, but also increases the Pell Grants and levels the playing field by putting $50 billion into historically black colleges and universities.

MAYOR PETE BUTTIGIEG: We can have debt free college for low and middle income students by expanding Pell grants and compelling states to pick up more of the burden. And on the back end, for those of us who do have a lot of debt, we can make it more affordable and we can expand a public service loan forgiveness program, which is an excellent program that is almost impossible to actually get access to right now.

DANA BASH, CNN NEWS: Senator Sanders, you want to forgive all student loan debt? Your response.

SENATOR BERNIE SANDERS: Matter of fact, I do.

BETO O’ROURKE: I support free two-year college. Earn that that Associates degree, realize your full potential.

MARIANNE WILLIAMSON: If we get rid of this college debt, think of all the young people who will have the discretionary spending, they’ll be able to start their business. The best thing you could do to stimulate the US economy is to get rid of this debt.

SENATOR AMY KLOBUCHAR: I want to make it easier for kids to go to college. And I think we do it by focusing our resources on the people that need it most. And my problem with some of these plans is they literally would pay for wealthy kids, for Wall Street kids to go to college. There’s no difference. It says everyone is free. I don’t think that makes sense.

JACQUELINE LUQMAN: The truth is, students leaving college with their hard-earned degrees, or if they even don’t have a degree but also leave with student debt, are leaving with a significant amount of that debt. According to Lending Tree, 69% of college students took out student loans, and they graduated with an average of $29,800 in debt, including private and federal debt.

Meanwhile, 14% of their parents took out an average of $35,600 in federal Parent Plus loans. Right now, Americans owe over $1.56 trillion in student loan debt, spread out among about 45 million borrowers. That’s $521 billion more than the total US credit card debt. Student loan debt is certainly a growing concern with each new generation, and one that needs to be addressed. But which Democratic candidate’s plan is the most effective at addressing this growing problem?

Here to talk about these plans, at least some of them, today is Adam Minsky. Adam is an attorney whose practice is focused entirely on helping student loan borrowers and their families. Adam, thank you so much for joining me today.

ADAM MINSKY: Thank you for having me.

JACQUELINE LUQMAN: And I should add that you are a contributor to Forbes Magazine, writing on student loan debt.

ADAM MINSKY: That is correct.

JACQUELINE LUQMAN:  So I think we need to start with understanding why student loan debt is a growing issue for so many people, because we hear this argument from people who are my age, I’ll just be honest, I’m 52, and older, saying, “Why are these kids wanting free college?” Well, here’s why.

According to US News and World Report, college tuition costs have risen over 200% over the past 20 years for all colleges and universities. So, many people like me who went to college, whether we earned a degree or not, 20 years ago or more could probably afford our tuition and fees at in-state schools without student loans at all. Or, if they went to a private school, their tuition was four times less expensive then than it is now. So people in my generation needed less money in student loans, if we needed them at all. And of course we know that the cost of living has risen significantly over this time. Wages have not risen as much, haven’t kept pace with the cost of living, and that has even impacted people with college degrees.

So that is the lay of the land for student loan debt, and why this is important. So when we understand the problem that we’re facing, Adam, now we have to focus on the answers that these candidates are offering and what they really mean. So let’s talk first about Kamala Harris’s plan. Now, Kamala Harris, and let’s compare hers to Bernie Sanders’ and Elizabeth Warren’s because, first, Kamala Harris says that her plan is student loan reform, while Sanders and Warren call for student loan forgiveness. Now, those are distinctly different terms, but is that distinction important?

ADAM MINSKY: I think it is. I mean, as I see it, I think most student loan proposals, most proposals to address what some people are calling the “student debt crisis,” I think they generally fall into two camps. There are folks that are offering or proposing some sort of widespread student loan cancellation or forgiveness, either with the view that student loan debt in and of itself is an injustice, or it’s problematic for the economy, or both.

And then you have folks that are offering some sort of changes to the student loan program that hopefully would either incentivize borrowers to do something specific, like start a business or work in certain fields for their careers, or it would improve or make fairer the system as a whole so that people aren’t subject to predatory practices so that they can afford repayment. I think most proposals fall into one of those two camps.

JACQUELINE LUQMAN: So let’s look at Harris’s plan in particular to start with. Her plan gives about $20,000 in student loan forgiveness if the borrower starts a business in a disadvantaged community and operates it for at least three years. Borrowers could receive a no-interest deferment during that time. This is an interesting approach just on its face. What are some of the further details of her plan? And what kind of impact will this plan have on this issue of student loan debt, in your estimation?

ADAM MINSKY: I mean, I think it’s an interesting proposal. To be perfectly honest, I don’t think that it would do much to address the overall student debt crisis. I mean, first of all, the eligibility criteria are very specific. Only borrowers who are Pell Grant recipients are eligible. You have to start a business and have the resources to do that. Most people would not, I think, be able to do that. You have to start a business and be successful in an economically disadvantaged area, which has a number of challenges as well. And the payoff at the end, while not nothing, is well below the average undergraduate student loan debt amount, which right now is well over 30,000, and this type of loan forgiveness would be capped at 20,000.

I think it’s an interesting proposal. I think that it could incentivize people to start businesses in certain areas, but I don’t think it really is a solution overall to the student loan crisis. And also, because you have all these different criteria, there are lots of ways that this program might not work for folks. I mean, we’ve already seen with existing programs, like Public Service Loan Forgiveness and Teacher Loan Forgiveness and TEACH grants, that when you have all these requirements that have to be met in a very specific way, not filling out a form correctly or having some areas of the program be somewhat ambiguous can lead to people being denied when they think they’re doing everything right.

JACQUELINE LUQMAN: And another interesting aspect of this program is the incentive to start a business in a disadvantaged area. You already have people who had to take out additional loans after receiving Pell Grants. Pell Grants, just to remind our viewers, do not have to be paid back in most instances. That’s why it’s a grant. So the reason they would need student debt assistance is because they had to take out additional loans on top of the Pell Grants. So they’re already severely economically disadvantaged. And starting a business though in an economically disadvantaged area has the additional hurdle of having your consumer base basically not having any money to support your business, to meet the criteria of your business having to be successful for three years in order to qualify for this program. That’s very interesting to me that that’s not a connection that seems to have been made by Harris’s campaign.

ADAM MINSKY: Yeah, I mean, I certainly appreciate what they’re trying to do. I mean, we definitely need incentives for folks to start businesses in economically disadvantaged areas. Other incentives that often cities and states use are tax rebates or tax incentives. This is one way of doing it. But, again, I’m not saying that it can’t work, but I think my concern is that, given average student debt balances and the challenges that you raised, I just don’t really see this program making a real dent in the student debt crisis or meaningfully changing the system that we are dealing with.

JACQUELINE LUQMAN: So now, having said that, let’s look at Warren’s and Sanders’s plans. Very different from Kamala Harris’s plans in very fundamental ways. But even Harris’s and Sanders’s plans are different from each other. So can you give us an overview of Sanders’s plan and then Warren’s plan, how they are similar and how they’re different?

ADAM MINSKY: Sure. Well, so both plans call for a very widespread student debt cancellation, which is fundamentally different from really any other proposal offered by the other candidates, at least as far as I’m aware.

Sanders’s proposal calls for 100% complete student loan forgiveness for both federal loans, private loans, parent loans. It wouldn’t eliminate student loans entirely going forward. In conjunction with his student loan forgiveness program, he also is proposing free college at certain institutions. That doesn’t cover everyone. Certain private schools and graduate programs, you might still need student loans for those, and so borrowers would still exist in terms of having student debt. But outstanding student debt under Sanders’s plan a would be canceled.

Warren’s plan also calls for widespread student debt cancellation, but her plan has a means-testing component where folks who make below a certain amount would be eligible for a loan forgiveness amount up to $50,000. And borrowers making between $100,000 and $250,000 in income would still get a portion of their student debt forgiven, but it would be a gradually reduced amount. And then folks making over 250,000 a year would not be eligible for loan forgiveness at all. According to her campaign, about 95% of student loan borrowers would receive some form of student debt cancellation, and the vast majority of outstanding student debt would in fact be canceled by her plan.

JACQUELINE LUQMAN: So it sounds like the major difference in scope between Sanders’s plan and Warren’s plan pretty much comes down to, Sanders’s plan is a complete cancellation of student debt across the board, regardless of how much money anyone makes. And Warren’s plan applies a means test and eliminates student debt forgiveness for people who make over $200,000 a year. Is that accurate?

ADAM MINSKY:  $250,000.

JACQUELINE LUQMAN: $250,000, okay.

ADAM MINSKY: And it’s somewhat of a progressive phase-out. So there’s not a hard line between the full benefit and no benefit. It’s sort of phased out for middle income folks. But yeah, I mean, the main difference I think is the means test. In the video that you played earlier, one of the candidates mentioned that complete cancellation would benefit presumably very wealthy families who can afford to pay, whereas Warren’s plan would address that. So I think that is sort of the main difference between the programs, is sort of universal debt cancellation versus means-tested.

JACQUELINE LUQMAN: So the other major difference between Warren’s and Sanders’ plans are how they intend to pay for them, which could also be a sticking point depending on how you look at it. According to Warren, she will pay for her plan by mostly taxing the uber rich, which of course, the uber rich probably don’t like that. Sanders’ plan, on the other hand, will be paid for by a general tax on all investments. And interestingly, that includes, if I’m correct, investments that include 401Ks. Is that accurate? And what could be the potential resistance to that?

ADAM MINSKY: Sure, yeah. I mean, as I understand it, so Senator Warren’s proposal would be entirely funded through a wealth tax, and not just a wealth tax on wealthy, but as you said, the very wealthy. So I believe she calls it an “ultra millionaires tax.” And her campaign says that it would really only impact around 75,000 families. So basically you’re taxing 75,000 people or families, and 40 million families are possibly benefiting from that resulting revenue. Sanders’s proposal, in contrast, would tax all transactions related to investment. And that includes, like you said, 401Ks, even relatively small 401Ks for low and middle income folks.

So I think it’s an interesting conversation, the debates about these two proposals. On the one hand, Warren’s plan has the means testing, which, there are people on both sides of that. But on the other hand, her plan is paid for by taxing a relatively small number of very wealthy people. Senator Sanders’s program and proposal is far more widespread in terms of what he’s offering for loan cancellation, but the tax would also impact a lot more people as well, including everyday folks. So it’s an interesting debate when it comes to those differences.

JACQUELINE LUQMAN: Now, we didn’t mention Joe Biden in this conversation up to this point at all, but I would be remiss if I didn’t at least ask: Does Joe Biden have a student loan forgiveness or reform plan at all? Because we’ve been so focused on the gaffes that have come out of his mouth, we haven’t been able to focus on if he has a plan for these things or not. Does he?

ADAM MINSKY: As I understand it, his proposal is more in line with that first camp that we were talking about where we’re going to sort of work with the existing system and try to make it fairer. So I think he’s calling for structural reforms within the system to make things like Income-Driven Repayment and Public Service Loan Forgiveness and other existing programs a little bit more smoothly run and a little bit fairer. But as far as I’m aware, his campaign hasn’t called for the type of student loan forgiveness and cancellation on a widespread scale like Senator Warren or Senator Sanders has offered.

JACQUELINE LUQMAN: Well, we are early in the 2020 campaign season, and we will have a lot more plans and platforms to examine in this area that is a growing concern for so many Americans, millions, tens of millions of Americans. So I want to thank you so much, Adam Minsky, for coming to speak with us today and giving us some clarity on this issue in regard to these particular candidates.

ADAM MINSKY: Thank you very much for having me. I appreciate it.

JACQUELINE LUQMAN: And I hope we’ll certainly continue this conversation, but thank you all for watching. This is Jacqueline Luqman, and this is The Real News Network.

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Adam S. Minsky is an attorney whose practice is focused entirely on helping student loan borrowers and their families.