Don’t call it Crazy Bernie, at least in front of student-laden graduates.
Many of them rely on Democratic presidential candidate Bernie Sanders to honor his commitment to abolish the nation’s $ 1.7 trillion student debt by taxing Wall Street.
Sanders, whose prospects as a Democratic candidate are fading, has a controversial bailout proposal that could be responsible for a large portion of his support among 45 million Americans with student loans, political analysts say. And regardless of the November election result, the Senator from Vermont has shifted political goals: the student debt crisis is now a major campaign issue, in the foreground and center, these analysts add.
On Friday, nodding at the financial impact of the coronavirus pandemic on student loan borrowers, President Trump announced a waiver of interest on student loans owed to federal agencies until further notice.
“We are advocates for all programs that reduce student loan debt,” said Michael Bloch, a young businessman who runs the Pillar startup in New York, which helps people manage student loans. Remember the stress of the loan for education. Bloch’s wife has a law degree with over $ 300,000 in student loans – and she wasn’t too far behind.
“I was setting the prospect of $ 250,000 in student loans in addition to his loans,” Bloch told The Post. “So in the end I decided to drop out of the business school.”
Sanders’ student grant poster is a huge tax and spends giveaways for student loan borrowers like Bloch and his wife, analysts note.
But Sanders’ bold plan raised a mess on Wall Street and analysts questioned who would really benefit.
His campaign said the plan would be funded for $ 2.4 trillion in 10 years, with a 0.5% tax on stock trades, or 50 cents on every $ 100 of shares; a 0.1 percent commission on bond trades; and a 0.05 percent commission on derivative transactions.
“A decade ago, America pledged thousands of billions of dollars to save the Wall Street banks, whose greed had brought the economy down,” according to Sanders. “Now, it’s time to commit a fraction of this to erase the student debt that is crushing 45 million Americans and dragging our economy.”
In fact, says street veteran and industry consultant Bill Harts, the taxes imposed by the plan would be paid by customers. “The Sanders regime is actually a tax on pensions and pension plans for every single policeman, fireman and teacher in the country,” Harts told The Post. “It’s just a bad idea.”
Harts said it is the same principle when taxes are used for other apparently well-intended purposes. “When you buy a car, the dealer doesn’t pay the tax, you do it,” he said. “When you buy gas, the oil company doesn’t pay the tax, you do. And when your pension plan buys shares, Wall Street will definitely not pay the taxes.”
Sanders’ plan may actually exacerbate economic inequality, analysts say.
“Most of the benefits are for people with the highest amounts of debt, including doctors, lawyers, dentists and others, because they have the highest salaries,” said Travis Hornsby, CEO of Student Loan Planner. “Those with smaller balances and lower wages would benefit the least.”
There are other concerns.
“Forgiveness sounds great, but what about the student who gets a loan the day after forgiveness?” said Wes Shannon of SJK Financial Planning.
Bloch isn’t waiting for Sanders to resolve the student loan chaos. “We realized this was a big deal for millions of Americans,” explained Bloch, whose pillar recently launched an app to help users determine the cheapest way to pay off loans.
“Student loans are at the forefront of national conversation and among political candidates,” he added, “so I’m personally thrilled to see them speak at the level where they are.”