Plans fronted by several Democratic candidates for president to erase an estimated $1.6 trillion in student debt deserve a closer look with an open mind, Sen. Jon Tester said Tuesday.
Tester told the Missoula Current during a media call that the cost of college has crippled a generation of students, robbing them of buying power and hobbling the nation’s economy.
The problem, he said, must be addressed.
“When they get out of college because they have so much debt, they can’t afford to buy a home, a car – nothing – and they can’t work where they want to work,” Tester said. “It’s a problem. We’ve got to fix it and make higher education more affordable.”
Tester was asked for his thoughts on the plan presented Monday by Sen. Bernie Sanders, one of the leading Democratic candidates for president.
As presented, Sanders’ plan would erase $1.6 trillion in student debt held by more than 40 million Americans. He proposes to do so by placing a 0.5 percent tax on all stock trades and smaller fees on bonds to raise $2.4 trillion over the next 10 years.
Tester said he welcomes the discussion, but added that the devil is in the details and those details haven’t been seen.
“You can’t do that with a magic wand,” Tester said. “That’s kind of Trumpian in nature, making promises and not backing it up. I’m all for it, but there has to be a plan. You just can’t make ($1.6 trillion) in debt disappear. It doesn’t happen. It’s not the way the world works.”
According the national economic research group FRED, the nation’s outstanding student loan debt has more than doubled since the end of the recession, increasing from $700 billion in 2009 to $1.6 trillion in 2019.
Sen. Elizabeth Warren, another leading Democratic contender, issued a plan earlier this year that would erase up to $50,000 in student debt for college graduates in a household making up to $100,000 a year.
To pay for it, Warren has proposed an annual 2 percent tax on those with more than $50 million in wealth and a 1 percent tax on those with more than $1 billion in wealth.
“While I’d be more than happy to take a look at proposals from Bernie or anyone else running for president or anyone not running for president about ways we can reduce that debt on those college kids, just saying it doesn’t make it happen,” Tester said.
Sanders’ plan was announced with U.S. Reps. Ilhan Omar and Pramila Jayapal and and is expected to be introduced in the House.
Tester said any idea to reduce student debt is worth exploring, and he offered other solutions as well. They include more Pell grants, driving down interest rates on student loans, putting more money into research and development at universities, and providing supplemental funding to American colleges.
“If you’re going to lower tuition costs, you have to have more public dollars going in,” Tester said, adding that college currently costs too much and locks many prospective students out.
“We’ve done it in the past as a nation, and it has incredibly positive impacts on our economy if you have a well-educated workforce with entrepreneurs,” Tester said. “That’s a given and there’s no doubt about it. There’s no debate. It’s a fact.”
If social media is any gauge, Sanders’ plan got mixed reviews from residents in Missoula, home of the University of Montana.
“Everyone benefits from an educated populace,” wrote Tony Reed. “If it’s a state school and you graduate, you shouldn’t be left with crippling debt. Reinstate the middle class by wiping the slate clean and providing opportunities for the next generation.”
Not everyone agreed.
“People in this country need to learn financial responsibility,” wrote Jason Andrews. “Don’t go to colleges you can’t afford, and don’t borrow money you don’t have – pretty basic principles. It’s called working and saving.”