Sen. Elizabeth Warren wants to make college debt-free

Sen. Warren announces plan to make federal student loans debt free.

Massachusetts Sen. Elizabeth Warren (D) has a new plan to increase government support of student loans: make them debt-free.

Speaking this week at the American Federation of Teachers gathering in Washington, D.C., Warren called for renewed federal and state investment and strengthened accountability to help encourage colleges to keep costs down and increase the quality of education, according to The Street. 

"Democrats talk about resources, pointing out that we're no longer investing in our kids the way we once did," Warren said at the conference. "Republicans talk about risk and incentives, arguing that students take on debt without fully understanding the consequences, and that colleges get access to federal dollars pretty much no matter the quality or cost of the education that they provide. Here's the truth: both sides are right… Our college crisis needs a one-two punch: more resources and better incentives to keep costs low."

The announcement comes in the wake of the rare decision to allow the write-offs of student loans on a limited basis to former attendees of Corinthian College, a for-profit school which went out of business and closed all of their locations in April. Traditionally, student loans are the one type of debt which can't be eliminated, even through bankruptcy. 

The Street reports that Warren wants colleges to share student loan risks with the government and called for states to being refinancing student loans. In addition, she advocated for a rule change to federal loan programs that favors students over profits from loans. The Street estimates that the Department of Education makes about $1.20 for every dollar it lends. 

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