Massachusetts Senator and 2020 Democratic presidential candidate Elizabeth Warren unveiled a highly polarized plan on Monday to make two-and-four-year public colleges free for students, accompanied by a plan that forgives student loan debt of up to 42 million Americans.
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Under Warren’s plan, each person’s student debt would get a relief of $50,000 if household income is up to $100,000. Higher incomes would also be entitled to massive debt reductions while households of over $250,000 would get no student debt reduction. When it's all said and done, about 95 percent of borrowers will see a reduction in their student-loan debt.
Economist Ben Stein told FOX Business’ Trish Regan that Warren’s numbers simply don't add up and that the plan won't be just a one-time payment.
"There is no free college education, who'll pay the faculty and buildings and heating of the building and textbooks? Any of this, this is an amount tens of billions of dollars every year,” he said on Monday.
The plan has come under scrutiny from some who say that alleviated the student-loan debt will cost too much. Americans currently owe an estimated $1.5 trillion in student loans and the debt-relief alone will cost up to $640 billion or about $2,000 per person. Others have suggested that students make smarter college choices rather than asking the U.S. government to subsidize their education.
Warren said she plans to fund the plan by using her proposed "Ultra Millionaire Tax" on the 75,000 American families who have at least $50 million in wealth.
But Stein says that her plan of a government quick-fix is irresponsible.
“It's highly irresponsible, and a U.S. Senator, which is a very high ranking position in this country, to go out and tell young people ‘look kids hang on a while, it will be free.’ That is wildly irresponsible.”
Many proponents of the plan say student-loans debt is one of the biggest obstacle preventing the economy from further growth and that a wide-range debt forgiveness plan will help jolt consumer spending. It may provide people with an opportunity to start businesses and buy a home without the fear of a substantive monthly payment.