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Legislation Would Cancel All Existing Federal Student Loan Debt

Eliminating tuition and fees at all public four-year colleges and universities and making community colleges, trade schools and apprenticeship programs tuition- and fee-free for all students are highlights of federal legislation introduced Monday by U.S. Senator and presidential candidate Bernie Sanders of Vermont and representatives Pramila Jayapal of Washington and Ilhan Omar of Minnesota.

Sen. Bernie SandersSen. Bernie Sanders

The College for All Act also eliminates all $1.6 trillion in student debt for the approximately 45 million Americans who owe.

Sanders called the legislation “revolutionary” and said it accomplishes three major goals: “First, in a highly competitive global economy, it makes certain that all Americans, regardless of income, can get the college education or job training they need to secure decent paying jobs by making public colleges, universities and trade schools tuition-free and debt-free.

“Second, in a generation hard hit by the Wall Street crash of 2008, it cancels all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the ‘crime’ of getting a college education.

“Third, it pays for these proposals by implementing a tax on Wall Street speculators. In 2008, the American people bailed out Wall Street. Now, it is Wall Street’s turn to help the middle class and working class of this country.”

Jayapal added that “a college degree should be a right for all, not a privilege for the few. What’s more, our student debt crisis is oppressing borrowers of color, shutting them out from the benefits that American higher education can and should offer.”

Discharging all of the outstanding federal loan debt “would not only allow Americans struggling with debt pursue their dreams,” Omar said, “but would unleash billions of dollars in economic growth, stimulating our entire economy. We can fully fund this with a small tax on Wall Street speculation. The American people bailed out Wall Street. It’s time for Wall Street to bail out American people.”

Under the proposal, the average student loan borrower would save about $3,000 a year. Student debt disproportionately impacts African-Americans and Latinos. Twelve years after starting college, the median Black borrower owes more than he or she took out.

The estimated $2.2 trillion cost of the bill would be completely paid for by a tax on Wall Street speculation, a levy of .5 percent on stock trades, a .1 percent fee on bonds and a 0.005 percent fee on derivatives, which would raise up to $2.4 trillion over the next decade.

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