‘Stop the insanity’: Top education official resigns and endorses loan forgiveness

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.

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Betsy DeVos through the years
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Betsy DeVos through the years
U.S. Education Secretary Betsy DeVos speaks at Harvard University's Kennedy School of Government in Cambridge, Massachusetts, U.S., September 28, 2017. REUTERS/Mary Schwalm

Continuing a day of one-on-one meetings with candidates for positions in his cabinet, President-elect Donald Trump met with Betsy DeVos, two polar opposites thought to be in contention for the education portfolio.

(Photo by Andy Katz/Pacific Press/LightRocket via Getty Images)

U.S. Secretary of Education Betsy DeVos, U.S. first lady Melania Trump and Jordan?s Queen Rania speak with students and administrators at the Excel Academy public charter school in Washington, U.S., April 5, 2017. REUTERS/Joshua Roberts
U.S. Secretary of Education Betsy DeVos speaks before U.S. President Donald Trump signed a memorandum "Increasing Access to High-Quality Science, Technology, Engineering and Math (STEM) Education" in the Oval Office of the White House in Washington, U.S., September 25, 2017. REUTERS/Joshua Roberts
WASHINGTON, DC - OCTOBER 30: U.S. Education Secretary Betsy DeVos (L), who was dressed as Ms. Frizzle from 'The Magic Schoolbus' series, and Counselor to the President Kellyanne Conway attend Halloween at the White House on the South Lawn October 30, 2017 in Washington, DC. President Donald Trump and first lady Melania Trump gave cookies away to costumed trick-or-treaters one day before the Halloween holiday. (Photo by Chip Somodevilla/Getty Images)

U.S. President-elect Donald Trump and Vice President-elect Mike Pence stand with Betsy DeVos before their meeting at the main clubhouse at Trump National Golf Club in Bedminster, New Jersey, U.S., November 19, 2016.

(REUTERS/Mike Segar)

Continuing a day of one-on-one meetings with candidates for positions in his cabinet, President-elect Donald Trump and Vice President Mike Pence met with Betsy DeVos, two polar opposites thought to be in contention for the education portfolio.

(Photo by Andy Katz/Pacific Press/LightRocket via Getty Images)

U.S. President Donald Trump (C, background) waits to interrupt Education Secretary Betsy DeVos as she speaks to students at a school choice event at the White House in Washington, U.S. May 3, 2017. REUTERS/Jonathan Ernst

Grant Hill #33 of the Los Angeles Clippers shakes hands with Owner Dick DeVos, Chairman of Amway and his wife Betsy DeVos during the game against the Orlando Magic during the game on February 6, 2013 at Amway Center in Orlando, Florida.

(Photo by Fernando Medina/NBAE via Getty Images)

US President George W. Bush and First Lady Laura Bush wave after they were introduced by the Chair of the Michigan Republican Party Betsy DeVos 30 October 2004 in Grand Rapids, Michigan. Bush is on his final three days of campaigning prior for the election November 02.

(STEPHEN JAFFE/AFP/Getty Images)

Education Secretary Betsy DeVos makes remarks during a major policy address on Title IX enforcement, which in college covers sexual harassment, rape and assault, at George Mason University, in Arlington, Virginia, U.S., September 7, 2017. REUTERS/Mike Theiler
U.S. Secretary of Education Betsy DeVos and U.S. first lady Melania Trump are greeted by a student during a visit the Excel Academy public charter school in Washington, U.S., April 5, 2017. REUTERS/Joshua Roberts
U.S. Secretary of Education Betsy DeVos (C) and Secretary of Health and Human Services (HHS) Tom Price (R) attend a cabinet meeting with President Donald Trump at the White House in Washington, U.S. March 13, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump, joined by U.S. Senator Marco Rubio (from L), advisor Jared Kushner and U.S. Education Secretary Betsy DeVos, thanks fourth-grade students Janayah Chatelier (3rd R) and Landon Fritz (R) for the "Happy Birthday Florida" card they gave him as he visits their classroom at Saint Andrew Catholic School in Orlando, Florida, U.S. March 3, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump talks to U.S. Secretary of Education Betsy DeVos during a meeting with teachers and parents at the White House in Washington, U.S., February 14, 2017. REUTERS/Kevin Lamarque
U.S. Education Secretary Betsy DeVos (2nd R) and U.S. Senator Marco Rubio (R-FL) (R) arrive with President Donald Trump aboard Air Force One at Orlando International Airport in Orlando, Florida, U.S. March 3, 2017. REUTERS/Jonathan Ernst
CAMBRIDGE, MA - SEPTEMBER 28: U.S. Secretary of Education Betsy DeVos speaks in a forum at Harvard University Kennedy School of Government on Thursday, September 28, 2017. (Photo by Katye Martens Brier for The Washington Post via Getty Images)

U.S. President-elect Donald Trump and Vice President-elect Mike Pence emerge with Betsy DeVos after their meeting at the main clubhouse at Trump National Golf Club in Bedminster, New Jersey, U.S., November 19, 2016.

(REUTERS/Mike Segar)

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Student loan plan at odds with the Trump administration

Johnson’s position on cancelling student debt is similar to student loan forgiveness plans announced by Democratic presidential candidates Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) — while sharply at odds with the Trump administration, the Republican party, and specifically his own boss.

"Their proposals are crazy," DeVos said during an interview on Fox News, referring to Democrats’ proposals on student loan cancellation.

"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 … Let's look at this for what it really is: A federal takeover of higher education."

Johnson, who was appointed by DeVos in 2017 as the chief operating officer of Federal Student Aid (FSA), said back then that he was “the right person to modernize the FSA for the 21st Century.” He later moved on to the strategy role.

Members of Congress had previously flagged his position — along with a few others in the DOE — as having “deep ties to the financial industry,” which could present conflicts of interest.

Johnson had been the founder, chairman and CEO of First Performance Corporation, which was a global payment card technology platform. He has also been with VISA, Deloitte, among others.

The Macon, Georgia native now has a bigger goal in sight. He announced his plan to run for the U.S. Senate seat in his state that was recently made vacated by Sen. Johnny Isakson (R-GA).

“I intend to follow Senator Isakson’s example as a conservative Republican who is able to work across the aisle in Congress,” Johnson said.

Aarthi is a writer for Yahoo Finance. Follow her on Twitter @aarthiswami.

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