Presidential candidate and Senator Elizabeth Warren wants to forgive students for student loans. She proposes to free tens of millions of Americans from having to pay off student debt for decades. Warren believes that it is necessary to write off debts of up to $ 50,000 for people whose family annual income is less than $ 100,000. For people who earn up to $ 250,000 per family, the Senator is ready to forgive less amounts. A program like this would help 95% of people cope – to one degree or another – with student loans. In addition, Warren said that education in public colleges should be made free of charge.
The senator’s Napoleonic plans could cost the state $ 1.25 trillion over 10 years. According to Warren’s idea, these costs could be covered with a tax for the rich – those who earn more than $ 50 million a year. This is one of the most ambitious claims among the Democratic candidates. One of her main opponents, Bernie Sanders, has yet to release his plan, but in the 2016 election, he was going to make public college tuition free. Two-thirds of the funds were to be provided by the state, and another third by the stateб for example – Kansas. Kamala Harris is ready to focus on fighting Corinthian Colleges, which has made education a business.
It is worth noting that at the state level, the Democrats have not yet been able to translate their ideas, and attempts to make life easier for young Americans are being made only at the state level. For example, in New York, the middle class can graduate from college for free. All of these plans show one important trend: education in the United States is becoming a luxury not only for low-income people, but also for the middle class.
Cheap or free education is one of the main reasons young Americans support Social Democrats. It is extremely difficult for them to pay off student loans for training. Adults have been doing this for decades: depending on the amount, the debt will have to be repaid from 10 to 30 years. At the same time, the cost of studying at colleges and universities has doubled from 1996 to 2016.
There has been a big shift. We know the stories of our parents who could get a job as a lifeguard for the summer and earn enough to pay for a college semester. The cost of education has risen sharply compared to wages. Four years of study at the best American universities – Harvard, Stanford or Yale – will cost over $ 250,000 in tuition, accommodation and study materials. Undoubtedly, there are also cheaper options, but they also cost a pretty penny. To become a UC bachelor, you have to pay $ 12,500 per year, but that’s just the cost of education. With accommodation and study materials, you will have to spend approximately $ 50,000 a year annually.
Many young people or their families do not have funds for education, so they take loans. American bachelors are in debt for the government of $ 30,500 on average. If you want to become a master, then you are digging yourself an even deeper debt hole. In all, students owe the country $ 1.5 trillion for higher education. Long repayment of the student loan leads to a series of other delays: young people postpone buying a house, a wedding, children, and cannot raise enough money for retirement. Every $ 1000 in education will respond with a 2.5 month delay in buying a home.
This affects the economy. There is an entire generation of people with large student loans, which limits the demand for other goods and services. People live with their parents or neighbors, so millions of houses and apartments are not being bought. This has a significant impact on the economy. As a result, social foundations are also changing, the concept of the “American Dream” is being transformed, because it is simply not possible to afford a home and family. Many industrialized countries manage to provide education to their citizens without creating long-term debt burdens for young people.