Janice Lozano
Bernie Sanders has proposed a plan to cancel all student loan debt, which amounts to \$1.6 trillion owed by roughly 45 million Americans. The plan includes eliminating tuition and fees, with the federal government providing funding to states, tribes, and historically black colleges and universities (HBCUs). Sanders proposes to cap student loan interest rates at 1.88%, compared to the current rate of 4.5% to 7%. The plan has been criticized for potentially damaging the economy and increasing federal subsidies for higher education. However, supporters argue that it will provide much-needed relief to borrowers struggling with student loan debt.
| Characteristics | Values |
|---|---|
| Student loan debt cancellation | $1.6 trillion |
| Number of Americans affected | 45 million |
| Interest rate cap on federal student loans | 1.88% |
| Current interest rate range | 4.5% to 7% |
| Graduate school tuition-free | No |
| Cost of higher education plan | $2.2 trillion |
| Funding source for the plan | Wall Street transactions |
| Estimated revenue from the tax | $2.4 trillion over a decade |
| Simplify FAFSA | Yes |
| Support for PSLF | Yes |
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What You'll Learn
Student loan forgiveness
Bernie Sanders has proposed a plan to cancel all student loan debt, which amounts to $1.6 trillion owed by roughly 45 million Americans. Sanders' plan includes the cancellation of federal student loans and private student loans. The plan does not include any income limitations, meaning that everyone receives student loan forgiveness. Sanders has argued for the fairness of this approach by stating that young Americans are being crushed by student loan debt, and that the federal government should not be making profits off student loans while students are "drowning" in debt.
Sanders proposes to pay for the plan by imposing a new tax on Wall Street transactions, which his campaign estimates will generate $2.4 trillion over the next decade. This is justified by the fact that Wall Street was bailed out for several trillion dollars, so a similar bailout for Americans burdened by student loan debt is reasonable. Sanders also intends to cap student loan interest rates going forward at 1.88%, compared to the current rate of over 5%.
Sanders has also expressed support for the Public Service Loan Forgiveness Program (PSLF), under which individuals who work for a qualifying organisation or the government can have their entire federal student loan balance forgiven. Sanders has criticised the implementation of the PSLF, calling for an overhaul of the system to ensure that qualified applicants have their loans forgiven.
In addition to his student loan forgiveness plan, Sanders has proposed making public colleges and universities tuition-free. This would be funded by matching any additional spending from states and tribes that reduces the cost of attending school, as well as tripling funding for the Work-Study Program. However, this plan does not include all college expenses such as room and board and other living expenses.
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Capping interest rates
Bernie Sanders has been a vocal supporter of free college and other benefits for college students. He has pledged to cancel all $1.6 trillion of student loan debt, including federal student loans and private student loans. Sanders' plan includes capping student loan interest rates at 1.88%significantly lower than the current average interest rate of more than 5% for undergraduate student loans.
Sanders believes that the federal government should not profit from student loans while students are struggling with debt. By capping interest rates, he aims to reduce the financial burden on students and invest in their future. This proposal is part of his broader plan to address the student debt crisis, which includes eliminating tuition and fees, increasing funding for educational opportunities, and providing relief to borrowers who have already taken out federal loans.
The senator has also criticised the high interest rates on student loans compared to other types of loans, such as auto loans and mortgages. He has proposed returning to the pre-2006 formula for setting student loan interest rates, which would cut interest rates in half for undergraduate students and cap undergraduate rates at 5% and graduate rates at 8.25%.
Additionally, Sanders wants to give borrowers the ability to refinance their federal student loans based on current interest rates, which could potentially lower their cumulative interest rates. This proposal is intended to provide flexibility and help borrowers manage their loan repayments more effectively.
While Sanders' plan for capping interest rates aims to alleviate the burden of student debt, it is important to note that it does not address the underlying cost of college tuition and living expenses, which continue to rise. Critics may argue that capping interest rates alone is not sufficient to address the broader issue of college affordability and that a more comprehensive approach is needed to ensure that higher education is accessible to all.
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$6.99
Making college tuition-free
Bernie Sanders has a plan to address the student loan debt crisis in the United States. The plan includes cancelling all existing student loan debt, which amounts to $1.6 trillion owed by roughly 45 million Americans. Sanders proposes to pay for this by imposing a new tax on Wall Street transactions, which his campaign estimates will generate $2.4 trillion over the next decade. This aspect of the plan has been pitched as a "bailout" for millennials and the working class.
Sanders' plan also includes making public colleges and universities tuition-free for all students. This would eliminate tuition costs and fees, but it does not cover all college expenses such as room and board and other living expenses. To address this, Sanders proposes providing additional funding for low-income students to help pay for living expenses and tuition at some private institutions that serve large numbers of minority students.
Sanders also aims to cap student loan interest rates going forward. He proposes to cap rates at 1.88%, significantly lower than the current average interest rate of more than 5%. Additionally, Sanders wants to triple the funding for the Work-Study Program and expand the Pell Grant program to make college more affordable for students.
The plan has faced criticism from some who argue that it would not help young Americans in the long term and would damage the economy. However, Sanders and his supporters believe that investing in young Americans and reducing their debt burden is crucial for their future and the country's progress.
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Reducing federal subsidies
Bernie Sanders has pledged to cancel all $1.6 trillion of student loan debt, including federal student loans and private student loans. This means that everyone with student loan debt would have it forgiven, with no questions asked. Sanders has also proposed making public colleges and universities tuition-free, which would reduce the need for future students to take out loans. However, this plan does not currently include graduate school tuition fees.
Sanders' plan also includes a cap on student loan interest rates going forward. He proposes that the interest rates be capped at 1.88%, compared to the current average interest rate on undergraduate student loans of over 5%. This would prevent the federal government from profiting from student loans while students are struggling with debt.
The issue of student loan debt and the potential reduction of federal subsidies is a highly debated topic. While some support Sanders' plan, others have expressed concerns. Federal taxpayers, for example, worry that they will ultimately bear the cost of loan forgiveness. Additionally, there is a concern that simply cancelling student debt without addressing the underlying issues of rising college costs and insufficient government funding for education may not be a long-term solution.
Some have proposed alternative approaches, such as the House Republican's "One Big Beautiful Bill Act," which aims to eliminate subsidized loans. This would result in students accruing interest from day one of their loans, even while still in school. While this approach could reduce federal subsidies, it would also significantly increase the overall cost of college for low- and middle-income students. Critics argue that eliminating subsidized loans would disproportionately affect students from low-income families, leaving them with no choice but to take out unsubsidized loans that start accruing interest immediately.
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Simplifying the FAFSA process
Bernie Sanders has pledged to cancel all $1.6 trillion of student loan debt, including federal student loans and private student loans, if he is elected president. Sanders believes that the American people deserve freedom, and that freedom is hindered by student loan debt. The average college student in the U.S. graduates with close to $30,000 in student loans, and one in six college students will be stuck with over $50,000 in student loan debt after graduation.
Sanders' plan also includes making college tuition-free, although this does not currently extend to graduate school tuition fees. The senator has also proposed placing a cap on student loan interest rates going forward, arguing that the federal government shouldn't profit off student loans while students are "drowning in debt".
While Sanders' plan does not specifically mention simplifying the FAFSA process, the FAFSA Simplification Act was enacted into law in 2020 as part of the Consolidated Appropriations Act of 2021. The Act represents a significant overhaul of federal student aid, including changes to the FAFSA form, need analysis, storage of federal student aid application data, and policies and procedures for schools that participate in Title IV federal aid programs. The full implementation of major provisions occurred during the 2024-2025 award year.
The FAFSA Simplification Act is an initiative by the United States Department of Education to make applying for federal student aid easier for students. The Department of Education launched the first major redesign of the FAFSA process in over 40 years. The California Student Aid Commission changed the California Dream Act Application (CADAA) in 2024-25 to include some updates made to the FAFSA form. The CADAA typically mirrors the FAFSA, but due to FAFSA Simplification, the applications are somewhat different.
The Department of Education has published the 2024–25 Draft FAFSA Specifications Guide, which consolidates all FAFSA-related processing information and guidance into a new, multi-volume resource. The Office of Postsecondary Education (OPE) has also published Q&As about FAFSA Simplification on the OPE website and plans to continue updating those Q&As as they receive additional questions from the community.
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Frequently asked questions
Yes, Bernie Sanders has pledged to cancel all $1.6 trillion of student loan debt, including federal student loans.
Yes, Bernie Sanders' plan includes making public colleges and universities tuition-free. However, this does not include all college expenses such as room and board and other living expenses.
Bernie Sanders has not stated whether he plans to compensate those who have already paid off their student loans.
Bernie Sanders plans to cap student loan interest rates at 1.88%. He also plans to triple funding for the Work-Study Program and expand the Pell Grant program to make college more affordable.
