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US Education Official, Wayne Johnson, to Resign, Calls for Mass Student Loan Forgiveness

October 24, 2019

 

 

Federal student aid official resigns post to apply for Georgia Senate seat

AJC, October 24, 2019

By Greg Bluestein

The former head of the federal government’s trillion-dollar student financial aid agency said Thursday he would resign his post at the Department of Education’s strategy office to seek Gov. Brian Kemp’s appointment to a U.S. Senate seat. 

A. Wayne Johnson told The Atlanta Journal-Constitution he plans to apply for the seat held by retiring U.S. Sen. Johnny Isakson after serving as a deputy to Education Secretary Betsy DeVos for the past two years.  

“I intend to follow Senator Isakson’s example as a conservative Republican who is able to work across the aisle in Congress,” said Johnson, 67. 

The Macon native joins about 500 applicants seeking Kemp’s appointment. The list includes current and former politicians, business executives, a U.S. ambassador,  decorated military veterans and radio commentators. 

Kemp’s pick would stand for election in November 2020 to fill out the remaining two years of Isakson’s term – he’s stepping down for health reasons – and be expected to run again in 2022 when Kemp is seeking re-election.

The only Democrat in the race so far is Matt Lieberman, the son of the former U.S. senator, but several other high-profile officials are maneuvering to run. 

If he’s selected, Johnson told the AJC he would campaign on a plan that would wipe clean the more than $53 billion in student loans that Georgians owe to the federal government and compensate those who have already repaid their loans.

It would provide students a $50,000 grant for their college education and other work training and licensing costs. People who have already paid their student loan debts would receive tax credits up to $50,000. 

It would be financed by a 1% tax on revenue generated by all employers – including non-profit organizations. He called it “fair, fiscally responsible and future-oriented so that the citizens of Georgia and across America can afford a college education.” 

Kemp has said he opened the process to the public to seek unconventional candidates, and Johnson was not likely to be on his radar before Thursday.

Johnson said he was “optimistic” he would win Kemp’s favor, and has even set up a website to promote his bid. But he has not yet decided whether he would run for the office if he’s not appointed. 

“The fact that I resigned my position at the U.S. Department of Education in order to pursue this appointment and this objective should convey how serious I am about this,” he said. 

He built a career as a consultant with banking companies before starting a private student loan firm in 2013. He was tapped by DeVos four years later to oversee the federal government’s $1.4 trillion portfolio of student loans. He stepped down after about seven months to head a new strategy office within the federal aid agency. 

Pressed on why he applied, Johnson said winning a U.S. Senate seat is the only way he can implement his student aid overhaul. 

“A college education is valuable to our citizens and it’s valuable to employers – but right now, only the students pay,” he said. “Employers say they need a better trained workforce. My plan sets forth an easy way to achieve that important goal.”

https://www.ajc.com/blog/politics/federal-student-aid-official-resigns-post-apply-for-georgia-senate-seat/PnmSqIUSqZy9l9xPUkl3GK/

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Trump education official to resign and call for mass student loan forgiveness

By Josh Mitchell

Wall Street Journal, October 24, 2019

WASHINGTON—

A senior student-loan official in the Trump administration said he would resign Thursday and endorse canceling most of the nation’s outstanding student debt, calling the student-loan system “fundamentally broken.”

A. Wayne Johnson was appointed in 2017 by Education Secretary Betsy DeVos as chief operating officer of the Office of Federal Student Aid, overseeing the $1.5 trillion student-loan portfolio. After seven months, he moved into a different role as chief strategy and transformation officer, leading a revamp of how the agency deals with borrowers and the companies that service the debt.

Mr. Johnson said repayment trends suggest much of the debt will likely never be repaid, and he is calling for moving toward a system that gets the government out of student lending.

“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, who has never run for elected office, 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.

Mr. Johnson has voted in Republican and Democratic primaries, records show, and describes himself as a moderate Republican. He said he intends to run as a Republican.

Mr. Johnson proposes forgiving up to $50,000 for anyone with federal student-loan debt, about $925 billion, he said. Nearly 37 million borrowers would have their entire student-loan balances canceled under the plan, he said.

He would also advocate for a tax credit of up to $50,000 for people who already repaid student debt, which he sees as key to attracting wider support for canceling student debt.

Mr. Johnson suggested paying for the plan largely with a 1% tax on corporate earnings. In late 2017, the Republican-controlled Congress passed a tax-cut package that included a cut in business tax rates. All of his proposals would require action from Congress.

Roughly a fifth of all student debt, federal and private, excluding debt owed by students still in school, is at least 90 days delinquent, New York Federal Reserve data show.

The Trump administration has hired consultants to assess the value of its student-loan portfolio, including how much is likely to be repaid. White House officials have expressed alarm over the low rate at which borrowers are paying down their balances.

About 41% of Americans support “immediately canceling and forgiving all current student-loan debt,” according to a Wall Street Journal/NBC News poll released in September. About 16% of Republicans supported such a plan, compared with 36% of independents and 63% of Democrats.

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.

Mr. Johnson, 67, has a doctorate in higher-education leadership from Mercer University and wrote his dissertation on student debt. He spent most of his career in financial services, and earlier this decade he headed companies that refinanced private student loans.

He said he sees his plan as part of an effort to get the government out of the student-loan business. Instead, he proposes for prospective students a $50,000 government voucher, which wouldn’t need to be repaid, to cover four years of tuition at college or graduate school.

His proposal is at odds with comments from Mrs. DeVos, who last week criticized the Democrats’ higher-education proposals. Asked on Fox News Channel about the Democrats’ plans to forgive student debt, she said: “Their proposals are crazy….Who do they think is actually going to pay for these? It’s going to be two of the three Americans that aren’t going to college paying for the one out of three that do.”

https://www.msn.com/en-us/news/money/trump-education-official-to-resign-and-call-for-mass-student-loan-forgiveness/ar-AAJh2w9?ocid=spartanntp  

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