Sen. Elizabeth Warren (D-MA) today announced a proposal to cancel most existing student loan debt and make tuition and fees at two- and four-year public colleges free.  To pay for the plan, estimated to cost $1.25 trillion over 10 years, Sen. Warren proposed a 2 percent annual tax on the 75,000 families in the U.S. who have at least $50 million in net worth. NAICU President David L. Warren, Ph.D. released the following statement regarding Sen. Warren’s plan: 

“Of course I would have deep concerns for its effect on private colleges—but it could also hurt public colleges.  In New England, for example, those institutions rely on out of state students. These out of state students would instead be encouraged to stay in their home state and go for free. But I also worry for low-income families because this directs enormous federal resources that could be put into need-based student aid into a specific set of colleges potentially limiting a low-income student’s choice of college. I think we should direct as much federal aid as possible to students who need it. Then those students could afford to go to the college where they decide they fit in best, whether that is a community college, a small private or a large public.”