Democrats’ student debt forgiveness proposals may resonate more in blue states

Personal Finance

Democratic presidential candidates New York City Mayor Bill De Blasio (L-R), Rep. Tim Ryan (D-OH), former housing secretary Julian Castro, Sen. Cory Booker (D-NJ), Sen. Elizabeth Warren (D-MA), former Texas congressman Beto O’Rourke and Sen. Amy Klobuchar (D-MN) take part in the first night of the Democratic presidential debate on June 26, 2019 in Miami, Florida.

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Democratic presidential hopeful Bernie Sanders has proposed wiping out all $1.6 trillion of outstanding student loan debt in the U.S., while rival Elizabeth Warren has called for canceling $640 billion of the debt.

Voters in blue states stand to have more debt forgiven under these plans than those in red states, according to an analysis by CNBC.

For example, the average student loan borrower in Maryland owes close to $40,000, compared with around $26,000 in North Dakota.

The data make sense considering blue states have “expensive colleges and workforces that are high skilled and highly credentialed,” said Andrew Ross, director of American Studies at New York University and an expert on debt.

Still, Ross said, it can be people with smaller balances that are more negatively impacted overall by outstanding debt. For example, if a student never graduated college, s/he may have less debt than others but more repayment difficulties because the lack of a degree makes it a challenge to find a decent paying job.

College affordability is an issue everywhere in the country, said Mark Kantrowitz, a student loan expert. “All members of Congress are feeling pressure to do something about the student loan problem.”

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Indeed, a Politico/Morning Consult poll found that more than half of Americans say student debt is “a major problem” for the country.

Yet while Republicans and Democrats are in agreement that student debt has to be addressed, “Democrats have been far more willing to invest in college affordability and to offer students relief from existing debt burdens,” said James Kvaal, president of the Institute for College Access & Success.

While the prospect of a debt jubilee is nowhere to be found in the Republican agenda, Ross said, “that’s not to say it wouldn’t appeal to GOP voters.”

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