The Chicago Tribune editorial board gave a failing grade to Sen. Elizabeth Warren (D., Mass.) for her student loan debt plan, calling it too costly and favorable to the wealthy.
"Warren's plan would cost more than advertised, and it would shower federal largesse on millions of Americans who don't need it. You don't need a college education to understand why that's a bad idea," the board wrote.
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Warren, a 2020 Democratic presidential candidate, has released a proposal she claims would eliminate student debt for 95 percent of Americans, with households making less than $100,000 getting up to $50,000 of their debts cancelled, and the amount of forgiveness getting smaller as salary rose. She said she would pay for it and other plans like universal child care with her potentially unconstitutional "ultra-millionaire tax" on citizens worth $50 million or more.
The Tribune wrote there was "plenty" of things wrong with her proposal, chief among them Warren's claim that forgiving those debts would cost $640 billion, without including the cost of eliminating tuition at $610 billion. The board cited an Urban Institute study placing the cost of debt cancellation at nearly $1 trillion.
It also called Warren's plan unfair to those who took on and then paid off their debts, in addition to being more favorable to richer people:
There is also the matter of fairness. A lot of people have sacrificed for years to pay back the money they borrowed — from their fellow citizens — for their education. They’d be justified in asking: If I had to pay it back, why don’t others?
Most of the benefits of this huge expense would go to the least needy. On average, someone with a bachelor’s degree will earn $1 million more than someone with only a high school diploma. Someone with a professional degree can expect to earn $2.3 million more than someone who only finished high school.
Brookings Institution economist Adam Looney estimates that under Warren’s program, "the bottom 20 percent of borrowers by income get only 4 percent of the savings. Borrowers with advanced degrees represent 27 percent of borrowers but would claim 37 percent of the annual benefits."
"Free tuition would have similarly skewed effects," the board wrote. "The biggest benefit would go to families that can easily afford to pay the full sticker price of public universities. Low-income students, by the way, already have access to Pell Grants that can cover up to $6,095 per year — which is more than enough to cover the average in-state tuition at a community college."
The board quoted a Hoover Institution scholar who said Warren's plan held a hidden, self-defeating incentive: If tuition is free and loans don't have to be repaid, more students will drop out without the desire for a degree to get a high-earning job.
Warren has gotten warm reviews from the media for her numerous progressive proposals and is even selling t-shirts with the words "Warren's got a plan for that." Warren was the best-received candidate at a forum for women of color last week, getting enthusiastic applause for telling the audience she had a plan for different concerns they had.