US presidential hopeful Bernie Sanders wants to wipe trillions in student debt

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Democratic US presidential hopeful Bernie Sanders has promised American students that if elected, he’ll wipe clean more than a trillion dollars in debt.

ABOVE VIDEO: Is a university degree worth the student debt?

Liberal US senator and 2020 presidential candidate Bernie Sanders has rolled out a proposal to erase all $1.6 trillion in student loan debt. 

The move would clean the slate for 45 million Americans, and be paid for through a tax on Wall Street. 

The pledge was met with ample support.

But not everyone was impressed by the policy - claiming it was unfair on those who’ve already paid back what they owe. 

Secondary education is not subsidised in the US, with a majority of students taking out loans through banks and other financial institutions to pay for higher education.

Among the class of 2018, roughly 60 per cent took out student loans. It is estimated that they will graduate with US$29,800 (AUD$42,806) worth of debt.

Australia’s Student Debt

Australia has a vastly different student loan system - but we’ve still got a significant amount of debt. 

2017-18 data shows that the total amount of HELP debt has jumped to more than AUD$61 million. The overall figure has been growing each year over the past decade. 

The idea to wipe all student debt has caught the attention of some politicians closer to home. 

NSW Greens MP David Shoebridge praised Sanders plan on social media, saying that Australia should adopt a similar attitude.

“We should be cancelling all student debt not placing further pressure on a generation facing job insecurity, low wages and high housing costs,” he said.

From July 1st the repayment threshold for HECS-HELP debts will drop to $45,881 before tax. This is the second time that the threshold has dropped within two years from $55,814 for the 2017/18 financial year to $51,957 in 2018/19.

Those in the lowest income bracket ($44,999-$51,957) will be required to pay back one per cent of their income. If that income is $45,000 a year it works out to be roughly $8.60 a week.

This percentage rises by one per cent for every income bracket increase, capping at a maximum of 10 per cent income repayment for those earning over $131,989 annually.

It’s predicted that the threshold reduction will save the government $345.7 million dollars until 2020-21.

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