Warren’s $640 billion student loan plan, first announced last year, calls for scrapping up to $50,000 of debt for student loan borrowers earning less than $100,000, with proportionally less debt relief for those earning up to $250,000.
Both Warren and Sanders, who has proposed eliminating all student loan debt, for anyone who owes a student loan, have introduced legislation in Congress to carry out their respective plans. Overall, more than 45 million Americans collectively owe some $1.6 trillion in outstanding student loan debt.
But Warren is now the first major 2020 presidential candidate to call for implementing a massive student loan forgiveness program through executive action without congressional approval. Her new position reflects the political challenges that loan forgiveness would face in Congress, especially if Republicans were to maintain control of the Senate.
GOP lawmakers have largely dismissed student loan forgiveness, and Education Secretary Betsy DeVos has called the idea “crazy.”
And not all Democrats have backed the idea. The main higher education plan unveiled by House Democrats last year calls for free community college and other new funding, but stops short of providing widespread student loan debt relief.
Warren’s new plan for executive action would require the Education Department to drastically expand its interpretation of the power it has to wipe out federal student loans under the Higher Education Act.
The Education Department has long had the power to “compromise” or waive student loan debt, but it has mostly done so only in limited cases to write off or settle the debts of defaulted borrowers who are unlikely to repay.
Previous proposals for executive action on student loans have also been narrow. For instance, in 2016 Hillary Clinton’s campaign promised that she would use executive action to give all federal student loan borrowers a three-month reprieve from having to pay their student loans.
Warren has long pushed the Education Department to more expansively interpret its powers to provide debt relief to student loan borrowers. She pressured the Obama administration to cancel the debts of students who attended Corinthian Colleges, a large for-profit college chain that collapsed amid allegations of fraud.
Warren’s campaign pointed to a new legal analysis by Harvard Law School’s Project on Predatory Student Lending that backed her contention that the Education Department already has the authority to provide mass cancellations of federal student loans.
Wide-ranging student loan debt relief is “a lawful and permissible use of the authority Congress has conferred on the Secretary of Education,” the group wrote in a six-page analysis of Warren’s plan.
Beyond sweeping student loan forgiveness, Warren’s plan on Tuesday also outlined other executive actions she would take to advance her higher education priorities without congressional action.
Warren said, for example, that she would use existing federal civil rights laws to go after racial disparities in student lending. She promised to direct the Education Department’s Office for Civil Rights to open “a wide scale investigation into the roles that colleges, state higher education systems, and the student loan industry play in contributing to racial disparities in student borrowing and student loan outcomes.”
In addition, Warren said that she would restore many of the Obama-era regulations cracking down on for-profit colleges that the Trump administration has repealed or scaled back. She said she would tighten IRS rules for for-profit colleges seeking to convert to non-profit entities, which critics see as a strategy to evade federal rules.
Warren also vowed to go after what she called “predatory financial products” in higher education, saying she would prioritize investigations into the emerging “income-share agreement” industry “for violations of federal civil rights and consumer protection laws.”
Income-share agreements are contracts under which an investor provides funding to students to cover tuition in exchange for an obligation that they repay with a percentage of their future earnings. Critics like Warren have said they’re worried that they don’t provides students with sufficient legal protections.