US education official resigns to run for Senate with plan to erase student loan debt
A chief student loan officer in the US Department of Education has resigned to make a bid for a US Senate seat running on a platform of massive student loan forgiveness.
Wayne Johnson, 67, has spent the last three years in key roles overseeing student loans at the Department of Education (DOE). US Secretary of Education Betsy DeVos appointed Johnson in 2017 to lead its Office of Federal Student Aid (FSA).
Johnson announced his resignation today and detailed a broad student loan forgiveness plan that he hopes will get him a Senate seat vacated by Johnny Isakson, a Republican US senator from Georgia who announced plans to retire in December due to health complications. Georgia’s GOP governor Brian Kemp will be appointing Isakson’s replacement.
A DOE spokesperson confirmed that Johnson stepped down today.
Johnson’s student loan plan promises up to $50,000 for students with any federal student debt and a tax credit of up to $50,000 for people who have already paid their debt.
The plan would be paid by a 1% tax on corporate earnings, including from corporations and not-for-profits.
“A college education is valuable to our citizens and it’s valuable to employers – but right now, only the students pay,” Johnson said in a statement. “Employers say they need a better trained workforce – my plan sets forth an easy way to achieve that important goal.”
Before he joined the DOE, Johnson was chief executive of a private student loan company based in South Dakota.
Over 44 million Americans have student debt worth about $1.5tr. The Federal Reserve reports that 54% of young adults in America who went to college took on some debt, including student loans, for their education. Two out of 10 of those young adults are behind in payments.
Difficulties paying student loans varies by race, with black and Hispanic borrowers more likely than white borrowers to be behind on their loans and less likely to have repaid their loans, according to the Federal Reserve.
While both sides have mostly agreed that student debt is a problem, Republicans and Democrats have approached the issue differently over the last few years.
Within the slate of Democratic presidential candidates, proposals range from Joe Biden’s modest plan for free community college and strengthening existing loan assistance
programs to Bernie Sanders’ legislation to erase all student debt with taxes on Wall Street.
Johnson’s plan is even broader than Senator Elizabeth Warren’s student debt plan. Warren proposed cancelling up to $50,000 of debt for Americans who earn less than $100,000, with some debt relief for borrowers earning up to $250,000.
Johnson told the Wall Street Journal that his plan will cost $925bn and will help 37 million Americans.
DeVos, Johnson’s former boss, scoffed at Democrats’ plans to forgive all student debt. “Their proposals are crazy. I mean, it’s trillions of dollars. Who do they think is actually going to pay for these?” she said last week on Fox News. “Let’s look at it for what it really is: a federal takeover of higher education.”
Republicans have proposed placing debt on college and universities and automatically deducting loans from a person’s paycheck. The White House has largely advocated limiting the amount of loans a student can take out for their education.