Health Editor’s Note: A. Wayne Johnson, the Department of Education’s Chief Strategy and Transformation Officer wanted to follow loan forgiveness plans proposed by Democratic presidential candidates. Free college for all? Cancel college debts? The Trump administration and Betsy Devos were having none of this…..Carol
‘Stop the insanity’: Top education official resigns and endorses loan forgiveness
By Aarthi Swaminathan/Yahoo Finance
A senior student loan official appointed by Education Secretary Betsy DeVos resigned on Thursday, the Education Department confirmed to Yahoo Finance.
“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, the Department of Education’s Chief Strategy and Transformation Officer, told the Wall Street Journal. “The time has come for us to end and stop the insanity.”
Outstanding student debt stands at $1.48 trillion as of the last quarter, according to the New York Fed. Borrowers in the current system are facing loan burdens that are souring quickly: Out of the outstanding severely derogatory balance, 35% are defaulted student loans. Those in public service who applied for Public Service Loan Forgiveness are seeing 99% rejection rates.
Johnson called for federal student loan debt up to $50,000 be forgiven on an individual basis and tax credits provided up to $50,000 for debt already paid. He said the idea developed after joining the administration and discovering the difficulties borrowers were facing with their student loans. The plan would cost an estimated $925 billion, according to Johnson.