Bernie Sanders on The Student Loan Debt Crisis
October 2, 2015

bern     Bernie Sanders, (D-VT), wants to make state tuition free.

The independent self-described socialist Senator from Vermont, currently in 2nd place for the Democratic nomination, wants to allocate $47 billion per year in federal money, to eliminate or significantly offset tuition and fees for public colleges and universities. The plan would be financed by imposing a 0.5 percent tax on all stock trades, a 0.1 percent fee on bonds and a 0.005 tax on derivatives (options, futures, swaps, etc.) transactions. You can read more about this tax – the so-called “Robin Hood Tax,” here. It’s not the first time he’s pushed this idea. Here’s another description of the plan on the candidate’s Web site, from 2013.Ultimately, Sanders wants to make tuition free at public colleges and universities nationwide.

Sanders would also like to streamline the financial aid application process – eliminating the need to reapply for aid every year, and expand work study programs – especially for schools with significant numbers of low-income students.

Sanders has also proposed going back to the pre-2006 method of calculating student loan. According to the Sanders campaign, student loan interest rates would be cut almost in half for undergraduate students, dropping from 4.32 percent to 2.32. In addition, Sanders also claims legislation would ensure rates never rise above 8.25 percent.

For those currently holding student loans: Sanders wants to let students with existing student loan balances to refinance existing loans to the lower interest rate if they choose.

Additionally, Sanders advocates a $15 per hour federal minimum wage by 2020, while requiring employers to pay for more sick days and provide at least twelve weeks of paid family and medical leave.

He also wants to reduce youth unemployment, which he says is “off the charts.” 

How one can do both in a dynamic economy of incentives is left as an exercise for the reader.