Warren's plan to wipe out student debt (and how she'd pay for it)

Sen. Elizabeth Warren, D-Mass., unveiled a new plan on Monday that would offer free public college for future students while cancelling up to $50,000 in student debt for over 40 million Americans.

Warren said her proposal was designed to confront a recent surge in student loans, now totaling $1.5 trillion nationally. She blamed insufficient funding in higher education in favor of lower taxes for the mounting student debt.

"The first step in addressing this crisis is to deal head-on with the outstanding debt that is weighing down millions of families and should never have been required in the first place," she said in a statement.

Much of the 2020 Democratic presidential field has already signed onto plans for either free public college, a signature part of Senator Bernie Sanders', I-Vt., platform, or debt-free college as well as various proposals to refinance student debt and lower interest rates.

President Donald Trump last month proposed limiting the amount of loans students can be taken out while offering a new income-based repayment option.

Warren's proposal goes further by allowing former students to immediately wipe out their debt.

Households making under $100,000 could cancel up to $50,000 of student loan debt. Those making up to $250,000 could still qualify for partial debt cancellation, with the amount available declining by $1 for every $3 they make over $100,000.

In an accompanying analysis, her campaign estimated that 95 percent of Americans with student loan debt would qualify for relief under her plan and more than 75 percent would wipe their debt out entirely.

Moving forward, Warren's plan would eliminate tuition and fees at two-year and four-year public colleges and redirect student loan benefits to cover additional costs incurred by students.

The campaign estimated the total cost at $1.25 trillion over 10 years, $640 billion of which would come from its student loan plan. Warren said she would pay for it using her proposed wealth tax.

The campaign unveiled its plan accompanied by a statement of support from Randi Weingarten, president of the American Federation of Teachers, who called it "as consequential as the GI Bill."