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Trump education official resigns, calls for student loan forgiveness

Samantha Fields Oct 24, 2019

We’re used to Democrats saying the student loan system is fundamentally broken. But today it was a Republican saying that. And not just any Republican, but a Republican appointed by Education Secretary Betsy DeVos to run the Office of Federal Student Aid.

A. Wayne Johnson, who has been one of the top officials administering the federal student loan program for the last two years, resigned Thursday, and came out in favor of a sweeping student debt forgiveness plan.

“I think what this shows is that the closer you are to seeing how the system works, the more you realize just how broken it is for millions of families across the country,” said Seth Frotman, who resigned his position as student loan ombudsman at the Consumer Financial Protection Bureau last year, in protest over how the Trump administration was treating borrowers.

Unlike Frotman, Johnson did not resign in protest, he resigned to seek a Senate seat that’s opening up in Georgia. But he did walk away from his time in the Department of Education saying he believes the entire student loan system is just not working.

“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 told the Wall Street Journal. “The time has come for us to end and stop the insanity.”

Johnson’s proposal, as explained to the Journal, would look like this: forgive up to $50,000 in federal student loans per person, and offer a tax credit of up to the same amount for those who have already paid off their loans. Ultimately Johnson, who also used to run a private student loan company, wants to get the federal government out of the student loan business.

“It’s definitely new for Republicans to be talking about this sort of policy change,” said Beth Akers, a higher education economist at the Manhattan Institute. But, she added, “I think it’s not a surprising turn of events given how popular loan forgiveness is among the general population.”

According to a recent WSJ/NBC News poll, about 40% of voters are in favor of canceling all student debt. The number was much higher among Democratic primary voters — 60%.

Still, Akers said, she thinks the tide is turning, to some degree.

“I think it’s challenging for Republicans right now to counter the narrative that’s coming from the Democratic Party about higher education,” Akers said. “Economists are always talking about how the returns of higher education are really good, and even though it’s expensive, a bachelor’s degree is worth a million dollars over the course of your lifetime. But those talking points just sort of fall flat when they’re in contrast to Democrats who are talking about these hugely generous loan forgiveness and free college plans.”

Jason Delisle, who works on higher education financing at the American Enterprise Institute, is not particularly surprised with Johnson’s proposal, largely because he’s coupling debt forgiveness with a plan to get the government out of the student loan business entirely, going forward.

“I’ve always thought it was only a matter of time before the conservatives latched onto the idea of forgiving all student debt as a sort of bargain to get the government entirely out of student lending,” he said. 

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