A top official for the country’s federal student-loan program has resigned and is endorsing canceling most of the country’s outstanding student debt.
Calling the system “fundamentally broken,” A. Wayne Johnson – appointed in 2017 by Education Secretary Betsy DeVos, says that repayment trends suggest most student loan debt will never be repaid, according to the Wall Street Journal.

His solution? Forgive up to $50,000 for anyone with federal student-loan debt, which would amount to a bailout of approximately $925 billion. The plan would wipe out the debt of nearly 37 million borrowers. He would also advocate for a tax credit for up to $50,000 for people who have already repaid their debt.
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Johnson, who has a doctorate in higher-education leadership and wrote his dissertation on student debt, was initially given the role of chief operating officer for the Office of Federal Student Aid, which oversees the country’s $1.5 trillion student-loan portfolio. After seven months, he transitioned to chief strategy and transformation officer, where he spearheaded a revamp of how the agency interacts with borrowers and companies that service the debt.
“We run through the process of putting this debt burden on somebody…but it rides on their credit files—it rides on their back—for decades,” he said, adding “The time has come for us to end and stop the insanity.”
Mr. Johnson said he arrived at his position to cancel student debt after he joined the administration and had a firsthand look at problems, including the high level of defaults and the difficulties of administering a program to erase loans for public-sector workers.
Mr. Johnson plans a long-shot bid for the Senate seat being vacated by Sen. Johnny Isakson (R., Ga.), who has announced he will retire Dec. 31 for health reasons. Georgia Gov. Brian Kemp, a Republican, is set to appoint an interim senator until a special election next year for the remaining two years of Mr. Isakson’s term. –Wall Street Journal
Johnson, who describes himself as a moderate Republican, has proposed a paying for the plan with a 1% tax on corporate earnings. The proposal would effectively reverse a late 2017 tax cut by the then-GOP controlled Congress.
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Approximately 20% of all student debt, federal and private (not including debt from those still in school), is at least 90 days delinquent according to the report, citing New York Federal Reserve data.
Meanwhile, a September Wall Street Journal/NBC News poll reveals that 41% of Americans support “immediately canceling and forgiving all current student-loan debt.” Just 16% of Republicans agreed,while 36% of independents and 63% of Democrats said the same.
The poll showed that 64% of Americans support income-based repayment plans, which forgive some student debt only after borrowers have spent a number of years paying it down. The Obama administration promoted and President Trump has endorsed income-based repayment.
Mr. Johnson’s proposal would forgive more debt than the plan proposed by Democratic presidential contender Elizabeth Warren (D., Mass.), which calls for forgiving up to $50,000 in student debt for individual families, and scaling back the benefits for those earning above $100,000. Mr. Johnson said he would set no income cap for those receiving benefits. Presidential candidate Sen. Bernie Sanders (I., Vt.) has called for canceling all federal student debt. –Wall Street Journal
The 67-year-old Johnson has spent most of his career in financial services, and headed companies that refinanced private student loans earlier in the decade. He views his proposal as a way to get the government out of the student-loan business. As an alternative, he has proposed that students receive a $50,000 forgivable government voucher to cover four years of tuition at college or graduate school.
Story cited here.









