"Post-secondary education should be the springboard to enable students to achieve their dreams not the impediment that prevents the realization of those goals," Clyburn said.
Outstanding student loan debt has exploded to $1.5 trillion, affecting almost 45 million Americans, including nearly 7.2 million in default. The average African American student loan borrower owes more money 12 years after graduation than they did at graduation, said Warren.
She stressed that student loan debt is a problem not just for borrowers but for the U.S. economy as a whole because borrowers aren't able to purchase a home, start a new business or engage in other activities that would boost economic activity. Student loan debt is a "drag on our entire economy; finding ways to cancel a big chunk of it meaning freeing up money to do more, buy more," said Warren.
The bill would:
- Cancel a maximum $50,000 of debt for borrowers with an adjusted gross household income of less than $100,000
- Reduces $1 of debt for every $3 in income above $100,000 for borrowers with an annual AGI up to $250,000
- Cancels these loans: federal family education loans, federal direct and Indirect student loans, Parent and Grad PLUS Loans and Federal Perkins Loans Direct and Indirect Student Loans
- Excludes amount of student loans canceled from taxable income
- Allows for cancellation of private student loans through the refinancing program in Title II
- Allows for refinancing of federal student loans to lower interest rates
The legislation would only affect those borrowers with existing student loan debt. A separate proposal to tuition-free public college would help reduce the amount of new student debt, along with expanded Pell grants, said Warren noting that "all these pieces fit together."
Warren said she would finance her student debt forgiveness, free public college tuition, universal child care and pre-K with her proposed 2% wealth tax on Americans with a net worth exceeding $50 million, which would raise $2.75 trillion over 10 years.
Sen. Elizabeth Warren at SXSW. (Photo: Callaghan O'Hare/Bloomberg) 
