Elizabeth Warren's New Bill Would Cancel Student Loan Debt For Millions

(CNN) -- Massachusetts Sen. Elizabeth Warren introduced a bill Tuesday that would cancel the student loan debts of tens of millions of Americans, a plan she first proposed on the campaign trail in April.

The 2020 Democratic presidential candidate is partnering with South Carolina Rep. James Clyburn, also a Democrat, who will sponsor companion legislation in the House.

The bill would forgive $50,000 in student loans for Americans in households earning less than $100,000 a year, resulting in immediate relief to more than an estimated 95% of the 45 million Americans with student debt.

For those earning more than $100,000, the bill would offer partial debt relief with the amount getting gradually smaller until it phases out. Households that make more than $250,000 are not eligible for any debt relief.

Warren's campaign has said that she would pay for the debt relief -- as well as her plan to make tuition free at public colleges -- with revenue from her proposed wealth tax. It would assess a 2% tax on wealth above $50 million and a 3% tax on wealth above $1 billion.

The one-time debt cancellation could cost $640 billion, the campaign has said.

Vermont Sen. Bernie Sanders, another Democratic presidential hopeful, also has a student debt cancellation proposal. But his goes further and would cancel all $1.6 trillion in outstanding loan debt. There would be no eligibility limitations and it would be paid for with a new tax on Wall Street speculation. Sanders has proposed making tuition free at public colleges, as well.

As proposed, Warren's bill would ensure that the debt canceled would not be taxed as income. Those borrowers with private loans would be allowed to convert them into federal loans so that they could be forgiven.

A list of cosponsors for the legislation was not immediately available.

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