The U.S. Presidential Candidates and Student Loan Debt Cancellation: Who Gets Relief Under Each Plan?

Student loan debt is a growing problem in America, but the U.S. presidential candidates don't agree on a solution.
Last updated Sep 26, 2019 | By Tracy Odell
Candidates and Student Loan Debt Forgiveness

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Americans currently hold nearly $1.6 trillion dollars in student loan debt. Yes, that's trillion with a "t."

That means Americans now have more student loan debt than they do credit card debt — and student loan debt continues to balloon. What's causing student loan debt to grow? A major culprit is the rising cost of college. Tuition prices at private four-year colleges doubled between 1988 and 2018. At public four-year schools, tuition and fees have almost tripled, according to the College Board's "Trends in College Pricing" report.

This growing debt burden is holding Americans back from buying homes, having children, and building their savings. And that's for borrowers who are able to make their payments; nearly 5 million Americans are currently in default on their student loans.

The answer to this crushing student loan debt? It depends on who you ask. Many of the U.S. presidential candidates have plans to address rising college costs and help student loan borrowers. But their proposals vary drastically in scope, and each one impacts a different group of people.

Here we'll take a closer look at each candidate's plan to address existing student loan debt through forgiveness measures and analyze which borrowers would see the biggest benefits if each proposal were to be enacted.

The most far-reaching plans from Elizabeth Warren and Bernie Sanders

First up, we'll take a look at the plans proposed by Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, D-Vt. These two plans would impact the largest number of Americans and would almost immediately erase debt (if enacted) for millions of borrowers. 

Warren is proposing canceling $640 billion of student loan debt, while Sanders' plan calls for erasing all $1.6 trillion of debt.

How Elizabeth Warren's student loan debt forgiveness plan would work

Warren is proposing canceling up to $50,000 in student debt for borrowers with a household income under $100,000. If you make more than $100,000 but less than $250,000, you'd also qualify for forgiveness — but on a sliding scale based on your income. Those making over $250,000 in household income would not qualify for forgiveness under Warren's plan.

Household income Student debt forgiven
Under $100,000 $50,000
Between $100,000 and $250,000 Subtract $1 from $50,000 for every $3 in household income over $100,000.

For example, if you make $130,000, you'd be eligible for $40,000 in forgiveness.

Over $250,000 $0; not eligible

Warren estimates that 95% of people with student loans would have at least part of their loans canceled under this plan, and 75% would have their loans fully erased.

Under Warren's plan, debt would automatically be forgiven using data the U.S. government already has about your income and student loan debt. Both federal and private loans would be eligible for forgiveness. And unlike current forgiveness programs, canceled debt would not be treated as income, so you would not be taxed on it.

The 15 states that would benefit most from Warren's plan

Warren’s proposal would have the biggest impact in key swing states such as Florida, Ohio, Michigan, and Pennsylvania. These are among the states with the most student loan borrowers who make under $100,000. Our analysis shows the following 15 states would be the most positively impacted by Warren's plan.

States most impacted by Warren's student loan debt forgiveness plan

Total number of student loan borrowers

Percentage of households making less than $100K

Estimated average debt per borrower

1. Texas

2.9 million

71.82%

$29,911.10

2. Florida

2.2 million

76.32%

$34,543.97

3. California

3.4 million

65.33%

$33,832.06

4. New York

2.2 million

69.03%

$34,894.86

5. Ohio

1.6 million

72.57%

$31,217.16

6. Georgia

1.4 million

73.29%

$37,206.36

7. North Carolina

1.1 million

75.59%

$33,678.99

8. Michigan

1.3 million

72.94%

$32,635.66

9. Pennsylvania

1.6 million

68.69%

$32,490.53

10. Illinois

1.5 million

68.70%

$34,588.62

11. Indiana

815,000

74.33%

$29,310.77

12. Tennessee

740,000

74.69%

$32,972.97

13. Missouri

732,000

73.50%

$32,064.40

14. Louisiana

540,000

80.00%

$30,729.36

15. South Carolina

627,000

75.54%

$33,933.41

Source: Income data from the U.S. Census Bureau and student loan data from the U.S. Department of Education. State rankings are based on borrowers, debt, and household income, normalized to account for state populations.

How Bernie Sanders' student loan debt forgiveness plan would work

The Sanders plan is the simplest to understand. He is proposing the cancellation of all student loan debt — with no limits on how much debt can be forgiven and no restrictions on household income to qualify. His plan would affect everyone who currently holds student loan debt.

The 15 states that would benefit most from Sanders' plan

The states most affected by Sanders’ plan are the ones with the most borrowers carrying the most collective debt. California, Texas, New York, and Florida collectively account for almost 25% of the total federal loans that would be forgiven.

While there’s crossover with the list of states most positively impacted by Warren's plan, we see states with higher average household incomes making the list for Sanders' proposal. 

States like New Jersey, Maryland, and Massachusetts — with 37%, 40%, and 38% of households making over $100K per year, respectively — would be more positively impacted under Sanders' plan than Warren's.

States most impacted by Sanders' student loan debt forgiveness plan

Total number of student loan borrowers

Federal student loan debt

Estimated average debt per borrower

1. California

3.4 million

$116.0 billion

$33,832.06

2. Texas

2.9 million

$89.5 billion

$29,911.10

3. New York

2.2 million

$76.5 billion

$34,894.86

4. Florida

2.2 million

$75.9 billion

$34,543.97

5. Georgia

1.4 million

$52.9 billion

$37,206.36

6. Pennsylvania

1.6 million

$52.3 billion

$32,490.53

7. Illinois

1.5 million

$50.7 billion

$34,588.62

8. Ohio

1.6 million

$50.5 billion

$31,217.16

9. Michigan

1.3 million

$42.1 billion

$32,635.66

10. North Carolina

1.1 million

$38.0 billion

$33,678.99

11. New Jersey

1.0 million

$34.2 billion

$32,432.43

12. Virginia

959,00

$34.1 billion

$35,565.29

13. Maryland

741,000

$28.9 billion

$39,027.68

14. Massachusetts

814,000

$25.7 billion

$31,584.12

15. Tennessee

740,000

$24.4 billion

$32,972.97

Source: Student loan data from the U.S. Department of Education

25- to 34-year-old borrowers would see the most relief

Under both Warren's and Sanders' debt forgiveness plans, younger Americans would be more impacted than their older cohorts. The 14 million borrowers who are currently 25 to 34 years old account for both the largest segment of borrowers and the largest student loan balance — $488 billion. They are also more likely to fall under the $100,000 income threshold in Warren's plan because they are earlier in their careers.

However, the average debt carried by the 35- to 49-year-old cohort is higher than the 24- to 34-year-old group. The average debt carried by a borrower in the 35- to 49-year-old range is $44,136, compared to "just" $34,079 for those in the 25-to-34-year range. Because Warren's plan also caps the amount forgiven at $50,000, we can assume that the 35- to 49-year-old borrowers would be more likely to carry balances over $50,000 and, thus, be more likely to hit the cap.

It's worth noting that while younger Americans would feel the greatest impact, there are more than a million borrowers nearing retirement — age 62 or older — who still carry a student loan balance. A total of $54 billion in student loan debt is held by this age group.

Age 24 or younger 25-34 years old 35-49 years old 50-61 years old 62-plus years old
Number of borrowers 8,036,200 14,319,600 10,807,400 4,837,700 1,348,600
Student loan balance $124 billion $488 billion $477 billion $202 billion $54 billion

Source: Student loan data from the U.S. Department of Education


Where the other candidates stand on student loan debt forgiveness

Sanders and Warren have produced the most detailed plans to date. But the other presidential candidates have released or hinted at their policy positions on how they'll help borrowers struggling with student loan debt, too.

Most candidates agree on improving the federal income-driven repayment program to make loans easier to repay, enhancing the existing Public Service Loan Forgiveness (PSLF) program, and making it easier to write off student loans in bankruptcy. But none go as far as Warren or Sanders in regards to proposing widespread debt cancellation.

There are several types of income-driven repayment plans available to borrowers today. Under these plans, borrowers pay between 10% to 20% of their discretionary income toward their loan balance each month. If after making these payments for a fixed number of years — ranging from 20 to 25 years, depending on the plan and type of loan — the borrower hasn't paid off the loan in full, the remaining balance is forgiven. The amount forgiven is considered income and taxed as such. These plans are only available for federal loans.

The PSLF program was introduced in 2007 as an incentive for individuals to work in public service jobs, which often come with low pay. Under this program, borrowers are eligible for federal loan forgiveness after making eligible payments for 10 years while working full time for a government or nonprofit employer. Borrowers don’t have to pay taxes on the amount forgiven under this program. But the existing PSLF implementation has made actually getting loans forgiven notoriously difficult for borrowers. A recent report found that 99% of borrowers who have applied for this type of forgiveness have been denied. Given the issues with the program, it's no surprise that many candidates are proposing improvements.

Joe Biden

Former Vice President Joe Biden hasn’t released a detailed policy plan around student loan debt, but he has hinted at his approach in recent speeches. Biden would reduce the percentage of the income that borrowers have to pay on income-based repayment plans and allow those making under $30,000 to pause payments without incurring interest.

Biden's plan would most impact borrowers struggling to make monthly payments on low or no income. He has not yet mentioned any new debt forgiveness plans, though he has said he supports the existing PSLF program.

Kamala Harris

The forgiveness plan proposed by Sen. Kamala Harris, D-Calif., would affect a much smaller group of loan borrowers than the plans proposed by Warren and Sanders. Her plan would be open only to Pell Grant recipients who start a business in a disadvantaged community. (Pell Grants are federal grants awarded to low-income students.)

To qualify for up to $20,000 in debt forgiveness, participants would need to not just start a business in a disadvantaged community but also keep that business afloat for three years. While working on the business, they'd be able to defer their loans, interest-free.

She’d also allow borrowers to refinance their loans at lower interest rates and expand the income-driven repayment program, which allows borrowers to repay their loans as a percentage of their income.

Pete Buttigieg

Pete Buttigieg, mayor of South Bend, IN, who has over $130,000 in student loan debt himself, has announced a limited debt cancellation plan. His proposal would cancel student loan debt for those who have attended low-quality, for-profit colleges. He is not in favor of a more widespread forgiveness program because of the cost.

Julián Castro

Julián Castro, former mayor of San Antonio, is proposing changes to income-based repayment and the existing PSLF program. Under his plan, borrowers earning less than 250% of the poverty line would not need to make payments on their debt; they also wouldn't accrue any interest on their loans for three years.

On the forgiveness front, Castro is proposing that debt be forgiven tax-free after 20 years of payments. He'd also create a loan forgiveness program where borrowers who receive certain types of federal assistance would have a portion of the loans forgiven.

Beto O'Rourke

Beto O'Rourke's debt forgiveness plan focuses specifically on teachers. Under his proposed plan, teachers would be eligible for tax-free debt forgiveness after teaching for five years in a public school. Teachers would also not need to make student loan payments while they are actively teaching.

O'Rourke is also proposing tweaks to the income-driven repayment program and PSLF. He'd adjust PSLF so that borrowers see 10% of their debt canceled each year tax-free, instead of having to wait 10 years for any of it to be forgiven.

Andrew Yang

Andrew Yang has a set of wide-ranging ideas for how to ease student loan debt. His proposals include helping borrowers with the burden of payments, such as reducing interest rates and creating a program that allows graduates to pay a percentage of their income instead of a fixed amount.

He also has several ideas around forgiveness, which include allowing students to pledge 10% of their salary for 10 years in return for forgiveness and exploring a reduction in principal on loans for recent graduates.

Cory Booker

Sen. Cory Booker, D-N.J., has not announced any student loan debt forgiveness plan. He has, though, expressed support for making it easier to refinance student loans, thereby allowing borrowers to take advantage of lower interest rates.

Amy Klobuchar

Sen. Amy Klobuchar, D-Minn., has said she does not support wide-spread student loan debt cancellation like the plans proposed by Warren and Sanders. But, like Booker, she does support lowering interest rates for borrowers.

Where President Trump stands on student loan debt forgiveness

It's still a crowded Democratic field, but whoever ultimately becomes the Democratic candidate for president will likely be facing President Donald Trump in the general election.

Trump is in favor of eliminating the existing PSLF program. Instead, he's proposing a new forgiveness program where borrowers who participate in an income-driven repayment plan would pay 12.5% of their discretionary income toward their loans and receive forgiveness on the remaining amount. Those with undergraduate loans would be eligible after 15 years of payments, while borrowers with graduate loans would be eligible after 30 years.

This proposal would only apply to loans originating after July 1, 2020, and it's unclear if the amount forgiven under Trump's proposal would be tax-free or taxed as income.

Cheatsheet: Presidential candidates' proposals on student loan debt forgiveness

Having trouble keeping all these student loan debt forgiveness proposals separate? You're not alone. Here's a quick rundown of the new debt forgiveness plans candidates have proposed:

Candidate Student loan debt forgiveness plan
Elizabeth Warren Forgive up to $50,000 in debt, tax-free, for borrowers who make under $250,000
Bernie Sanders Forgive all debt, tax-free, for all borrowers
Joe Biden No debt forgiveness plan announced
Kamala Harris Forgive up to $20,000 for Pell Grant recipients who start and run a business for three years
Pete Buttigieg Forgive debt for those who attended low-quality, for-profit colleges; does not support widespread forgiveness
Julián Castro Forgive debt, tax-free, after 20 years of payments
Beto O'Rourke Forgive debt for teachers after they work for five years in a public school
Andrew Yang Forgive debt after borrowers contribute 10% of their pay toward loan repayment for 10 years
Cory Booker No debt forgiveness plan announced
Amy Klobuchar Does not support widespread debt forgiveness
Donald Trump Eliminate PSLF program and replace it with a program that offers forgiveness after 15 years of income-based payments by undergrads and 30 years of payments by grad students

Methodology:

We took a look at the publicly announced debt forgiveness plans proposed by the top candidates running for U.S. President. We included the Democratic candidates who qualified for the debate on Sept. 12, 2019.

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