Elizabeth Warren announces ambitious plan to cancel $50,000 in student loans for many Americans

Campaign says plan would cost $1.25 trillion over 10 years and would be paid for by tax on wealth

Elizabeth Warren has released a sweeping new plan to relieve massive amounts of college tuition debt in the United States, a policy proposal that positions her on the leftward edge of the burgeoning 2020 democratic primary field.

Ms Warren, a senator from Massachusetts who has set herself apart from her competition by releasing detailed policy proposals while on the campaign trail, announced her plan on Monday.

If she has her way, the US would forgive up to $50,000 worth of student debt for individuals with household incomes under $100,000 — a proposal that would eliminate at least a portion of debt for 95 per cent of American student loan debt holders.

In a Medium post announcing the plan, Ms Warren said the student debt crisis has been fuelled by government’s decision to cut taxes for the wealthy and to de-prioritise free and accessible public education.

“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,” Ms Warren wrote.

“That’s why I’m calling for something truly transformational — the cancellation of up to $50,000 in student loan debt for 42 million Americans,” she continued.

Ms Warren’s plan also calls for the elimination of tuition and fees for America’s two- and four-year public colleges and universities.

The price tag of her plan? She says it will cost $1.25 trillion over 10 years to eliminate that debt alongside public tuition, and that she would pay for it through a 2 per cent tax on wealth accumulations exceeding $50m, and another 1 per cent on top of that for wealth in excess of $1bn.

In laying out her case for the plan, Ms Warren described her own personal experience seeking higher education, which she said was possible as a result of affordable tuitions.

An analysis of Ms Warren’s plan by student debt experts, cited by Ms Warren’s campaign, indicated that the debt relief would help those with the least ability to pay of their debts. Some 43 per cent of student loan debt carriers are expected to default on their lines by 2023.

Individuals with greater incomes would still be eligible for debt relief under Ms Warren’s plan, with a tiered system leading up to $250,000-a-year household salary receiving no relief.