Trump-Appointed Student Loan Official Resigns: “Stop the Insanity”

U.S. Secretary of Education Betsy DeVos speaks as President Trump listens during a parent-teacher-conference listening session.
U.S. Secretary of Education Betsy DeVos speaks as President Donald Trump listens during a parent-teacher-conference listening session. Photo: Alex Wong/Getty Images

A top official within the Department of Education’s Office of Federal Student Aid has resigned, citing a broken student-loan system. “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,” A. Wayne Johnson told the Wall Street Journal on Thursday. “The time has come for us to end and stop the insanity.” Johnson, a Republican, is now considering a run to replace Johnny Isakson when the Georgia senator retires at the end of the year. If elected, he may make student-loan forgiveness a legislative priority.

Johnson has outlined his own plan to relieve student-debt burdens, the Journal reports. He’d forgive all federal student-loan debt up to $50,000. Borrowers who have already repaid their debts would receive tax credits worth up to $50,000. Johnson says that he would pay for the plan with a 1 percent tax on corporate income.

Donald Trump had appointed Johnson to become the office’s chief operating officer in 2017; he later changed roles, according to the Journal, and became the office’s chief strategy and transformation officer. Until Thursday, it was Johnson’s responsibility to modernize financial-aid delivery; a speaker biography provided for him by the International Institute for Business Information & Growth said he was leading “the conversion to a mobile first, mobile complete, omni-channel environment providing optimum customer service to students, parents and borrowers.” Whatever this actually means, Johnson apparently decided it wasn’t possible — that the student-loan system could not be modernized, indeed could not be made to work at all.

As an alternative, he’s proposed a one-time $50,000 tuition voucher that functions like a grant. It’s not clear if Johnson wants to offer that voucher in addition to Pell Grants, which do not have to be repaid, or if it would replace them. A $50,000 voucher doesn’t actually get students much, even at public colleges and universities, so it’s unlikely that Johnson’s plan would totally eliminate the need for some student loans without additional and serious tuition reform. Senator Bernie Sanders has proposed tuition-free public college, for example, and so has Senator Elizabeth Warren; on the subject of debt cancellation, though, Sanders has the more generous plan. Unlike either Warren or Johnson, he’d cancel all existing federal student-loan debt.

Though Johnson’s proposal doesn’t go as far as Sanders’s plan, the former Trump official is now significantly at odds with the rest of his party, not to mention the White House itself. Under Secretary Betsy DeVos, the Department of Education has rejected 99 percent of all applicants to the Public Service Loan Forgiveness Program. Earlier this October, NPR reported that DeVos’s department had blocked the Consumer Financial Protection Bureau from receiving information it needed to complete an investigation into the program’s high rejection rate. DeVos has also made it more difficult for students to receive student-loan forgiveness if they’ve been defrauded by their universities. “Under the previous rules, all one had to do was raise his or her hands to be entitled to so-called free money,” she complained in 2017. The nation’s total student-loan debt hit $1.6 trillion earlier this year.

Cancel Student Loan Debt, Former Trump Official Says