Sen. Bernie Sanders announced a plan on Monday to erase the country's $1.6 trillion outstanding student loan tab, intensifying the higher education policy debate in the 2020 Democratic presidential primary.
The Democratic presidential candidate's legislation — dubbed "The College for All Act" — will release all 45 million Americans from their student debt and be paid for with a new tax on Wall Street transactions.
The proposal goes further than fellow Democratic candidate Elizabeth Warren's plan, which caps student debt forgiveness at $50,000 and offers no relief to borrowers who earn more than $250,000.
Outstanding education debt in the U.S. has eclipsed credit card and auto debt. Today the average college graduate leaves school $30,000 in the red, up from $10,000 in the 1990s, and 28% of student loan borrowers are in delinquency or default.
Sanders' plan would make two- and four-year public colleges and universities tuition- and debt-free. Trade schools and apprenticeship programs would be tuition-free, as well.
"This is truly a revolutionary proposal," Sanders told The Washington Post. "In a generation hard hit by the Wall Street crash of 2008, it forgives all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the 'crime' of getting a college education."
Sanders is introducing the legislation with Rep. Ilhan Omar, D-Minn., and Rep. Pramila Jayapal, D-Wash., the co-chairwomen of the Congressional Progressive Caucus.
The $2.2 trillion plan would be paid for by a new tax on financial transactions, including a 0.5 percent tax on stock transactions and a 0.1 percent tax on bonds. That levy would raise up to $2.4 trillion over the next decade, according to the senator's office.
Critics say Sanders and Warren's plan is too expensive and fails to target borrowers who most need relief. The top quarter of American earners hold about a third of the outstanding student debt. "Most borrowers are capable of repaying their student loans," said Mark Kantrowitz, the publisher of SavingForCollege.com.
Proponents say the proposal addresses a debt burden that has ballooned over the last decade and has stunted the financial lives of a generation of Americans.
Recent research has found forgiving student loan debt would raise Gross Domestic Product, add more than one million jobs and increase small business formation and homeownership rates.
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WATCH: Canceling student debt: The costs and benefits of a 2020 plan