Bernie Sanders’ Student Loan Forgiveness Plan Works for Millennials, but What About Everyone Else?

How the presidential candidate's policy impacts all Americans.
  • It’s official: Sen. Bernie Sanders, I-Vt., will run in the 2020 election.
  • Free college and student loan forgiveness was a major part of Sanders’ 2016 platform and will likely stay that way in 2020.
  • Free college would likely cost hundreds of billions but should be weighed against the consequences of maintaining student debt.

Sen. Bernie Sanders, I-Vt., officially announced his 2020 presidential campaign on Feb. 19.

Sanders drew many supporters to his views during his 2016 presidential campaign, with his policy focus on free college tuition. Citing exorbitant tuition costs and the need for a well-educated populace, Sanders wrote in a 2017 opinion piece, “It’s time to make public colleges and universities tuition-free for the working families of our country.”

The senator has taken steps to combat student loan debt. He introduced the College for All Act in April 2017, which would’ve made colleges tuition-free for families earning $125,000 or less per year. College issues mostly affect younger voters, and Sanders commanded the favor of voters under 35 in 2016, but how will his tuition policy affect voters as a whole?

Related: Ideal Salary Needed to Afford College in Your State — Without Loans

Cost of Free College Tuition

“Free” college won’t be free. Sanders’ policies, including free schooling, would cost trillions of dollars. Sanders has proposed budget cuts on high-spending government sectors such as the military, as well as increased taxes on the wealthy. Sanders estimated at the time that the proposed College for All program would cost the government $47 billion a year. This would cover approximately two-thirds of the total cost of tuition, with states covering the rest. All told, the legislation would cost an estimated $600 billion, according to an April 2017 press release.

That’s a hefty price tag, to be sure, but free college is a plan more and more Americans seem to support. Roughly 60 percent of Americans support free college tuition, Reuters reported in August 2018. Democrats are slowly embracing different forms of free college, with some supporting the idea of making the first two years of college free.

Learn More: How ‘Free College Tuition’ Can Still Cost You Thousands per Year

Student Debt and College Tuition

Even if the notion of free college isn’t universally accepted, most people agree that Americans carry an insane amount of student debt. More than 44 million borrowers carry student loan debt as of the fourth quarter of 2017. There’s a case to be made for wiping out all that student debt, according to CNN Money, which reported on findings that forgiving student loans “would lead to a boost in GDP by an average of $86 billion to $108 billion annually over the next 10 years” and economic models “also show that it would reduce the unemployment rate by about 0.3 percent.”

Tuition and student debt are inextricably linked. Student loan debt has further-reaching consequences for the economy as a whole:

  • Student loan debt increases wealth inequality due to how it impacts savings plans over the course of loan repayment.
  • Debt delays homeownership for millennials by up to seven years. This also forces some graduates to move back in with their parents.
  • But even the ones who are lucky enough to buy a starter home with student debt have trouble upgrading.
  • The more debt you have, the more you have to work, and it looks like student debt is contributing to people staying in the workforce longer, which also affects retirement plans. Nearly 3 million people over 60 were still paying student loan debt in 2015, according to the Consumer Financial Protection Bureau.

See: 12 Ways Student Debt Hits Everyone’s Wallet

Younger Americans would appear to benefit most under Sanders’ college tuition policy, given how becoming debt-free earlier would allow them to explore more markets as they grow older. But Sanders has also “proposed cutting all student loan interest rates in half,” according the Washington Post. In that case, there’d be winners across the generational board.

Keep reading about the average student loan debt by state.

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