People with up to $50,000 in federal student loan debt could see that disappear under a proposal from a high-ranking U.S. Department of Eduction official, who’s announce he’s resigning his post.
A. Wayne Johnson, Federal Student Aid’s chief strategy and transformation officer, also wants individuals who’ve already repaid the money they borrowed to be eligible for a tax credit as high as $50,000, according to the Wall Street Journal. Both of these would be buoyed by a proposed 1% tax on corporate earnings.
Nothing can happen without Congressional approval, though.
Johnson described the system the U.S. uses to loan money to students to attend college as “fundamentally broken,” the Journal reported.
“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. “The time has come for us to end and stop the insanity.”
Student loans have a high default rate. His loan forgiveness idea translates into $925 billion.
Johnson’s boss doesn’t seem to be on board. U.S. Secretary of Education Betsy DeVos has called Democrats’ ideas to tackle the student loan problem in the country “crazy” on Fox News.
“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,” she said last Friday.
Johnson, whom DeVos initially appointed COO of FSA in 2017, is eyeing the Senate seat of Johnny Isakson, a Georgia Republican retiring on December 31. Isakson’s replacement will be selected by Gov. Brian Kemp. Johnson is a Macon, Georgia, native.