Elizabeth Warren’s idea to forgive the nation’s student loan debt is a fantastic idea – if you’re in favor of redistributing money up the wealth distribution.

Warren wants to forgive up to $50,000 worth of student loan debt for borrowers with household incomes of less than $250,000 (meaning this will essentially apply to everyone who isn’t a med-school graduate), which she believes will cost $640 billion and then an additional $610 billion over 10 years to make college tuition free for future students at public universities.

It’s no secret that those who attend college are generally more affluent than those who don’t – though interestingly, a larger share of poor people attend college in America than in Denmark, where college is tuition free. While I’m certain Warren would like to paint the image of the poor burdened by student loan debt, it’s surprisingly easy for the poor to take on no student loan debt due to existing government programs. The average Pell Grant a poor American student would be eligible for in 2017-2018 of $4,010 was higher than the average community college tuition that year ($3,347), and the maximum Pell Grant of $5,920 covered most of the average in-state college tuition that year ($9,970).

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While tuition is hardly the only cost associated with college, I bring up Pell Grants only to make the point that there already is a system making it possible for lower-income earners to incur minimal student loan debt (far below the national average of nearly $30,000). That’s relevant, because it means that the poor wouldn’t be those benefiting from Warren’s student loan forgiveness, as a new analysis from the Brookings Institution shows:

[Under Warren’s proposal] the top 20 percent of households receive about 27 percent of all annual savings, and the top 40 percent about 66 percent. The bottom 20 percent of borrowers by income get only 4 percent of the savings. Borrowers with advanced degrees [Master’s degree or higher] represent 27 percent of borrowers, but would claim 37 percent of the annual benefit.

The logistics of Warren’s debt forgiveness are also inconsistent. While she wants to make public colleges tuition free, she wants to forgive student loan debt from all colleges public and private – but a large chunk of student debt for many students comes from living related expenses (hence why there are similar levels of student loan debt in Scandinavia, where college is tuition free, and America). Student loan debt will still accumulate with “free’ college,” so should we expect a student loan debt bailout every couple of years?

While Senator Warren’s proposal offers “free college” at public institutions (another regressive element given 35 percent of public college students are from families in the top 20 percent of the income distribution), millions of students will continue to borrow to attend private institutions, graduate and professional schools, and to cover living expenses while enrolled. How can we sustain a system with open-ended borrowing and broadly available loan forgiveness?

Some other points worth considering:

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  • Warren’s proposal effectively makes those who never attended college help pay off the debt of those who did. How is this fair, when college graduates out-earn those who never attended? Additionally, as already established, those who attend college in the first place tend to come disproportionately from families in the top 20% of the income distribution.
  • Playing off the point above, over “90 percent of children from the highest-income families have attended college by age 22 versus 35 percent from the lowest-income families.”
  • Warren’s cost estimates for “free” public college are conservative, because they aren’t accounting for the fact that there would be a massive influx of new public-college students fleeing private-college tuition.

Warren’s plan would save the poorest student loan borrowers an average of $569 a year, compared to $2,653 for someone in the 80th to 90th income percentile (and the latter far outnumber the former). While Republican politicians have been lacking in drafting solutions to combat the student debt crisis – I can’t imagine it’s hard to come up with a plan better than Warren’s.

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