The Exponent Explains: Student debt forgiveness, courtesy of the Green Party

This column is answering a reader question from Facebook: Would you explain the Green Party’s plan to forgive education loans?

This campaign season, Americans have heard many promises. The usual “cut taxes but have more services” promise, the “fix the economy” promises and the “fix the education system” promise. However, a new promise has entered the list for this race: free college. Faced with the rising cost of tuition and the rising enrollment in college, some presidential candidates have made free tuition, or loan forgiveness, a huge part of their platform. Take Democrat Bernie Sanders’ run, for instance. A huge component of his campaign was eliminating university tuition, and it resonated well with many young voters. Hillary Clinton’s platform, according to her campaign website, is that lower income families will pay no tuition at any in-state college. Even Republican Nominee Donald Trump said in his book “Crippled America” that  the government should not profit from federal student loans. However, with Sanders out of the race, there is only one party promising student loan forgiveness, and that is the Green Party’s nominee Jill Stein. But just how does the Green Party plan to “abolish student debt to free a generation of Americans from debt servitude,” as Stein’s platform states?

“I’m suggesting that the Federal Reserve actually buy that debt, like it did for Wall Street,” Stein said during a town hall meeting, “but in this case, that it buy that debt and it basically declare that debt null and void, which essentially means that the Federal Reserve would be expanding the money supply into the hands of young people so that they can spend it into the economy.” The actual mechanism to do it is clear, but how would the Federal Reserve handle it? There is about $1.3 trillion in student loans currently. If the debt were to be passed onto the taxpayers in a lump sum, each taxpayer would have to pay around $5,000. Nobody is too sure exactly how the deficit would be paid (the current federal debt is $19.5 trillion), but Stein offers this as a counterpoint: “We would owe that money to ourselves. But as a nation, we have the capacity to do that. We can decide to spend money on ourselves, and in particular, we can decide to spend money on our younger generation who currently does not have a future. Who is more worth spending money on than our younger generation?”

Stein argues that we have done it in the past, except with a much bigger price tag: the Wall Street bailout. “We found a way to bail out Wall Street,” Stein said. “And when we needed the money, we found it, including about $17 trillion worth of practically zero-interest loans, which was made available, you know, as needed.”

So, as a summary answer to the question, Jill Stein and the Green Party want to eliminate student debt.

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