Earlier in the year, we reported on the student loan watchdog quitting from his post. He felt that the federal government wasn’t doing enough to help people. In fact, the Trump administration seems to be doing whatever it can to prevent struggling people from receiving help. Of course, it’s a matter of politics. The president believes that the taxpayers shouldn’t be forced to face the brunt of the $1.56 trillion they accumulated.
Yet, on the Democratic side, nearly every candidate has embraced offering some type of student loan forgiveness. They aren’t the only ones who see there’s a problem. One of Trump’s own appointed officials recently resigned in frustration. A. Wayne Johnson, a republican, was brought on as a financial services executive. He was appointed by Education Secretary Betsy DeVos.
When Johnson resigned, he said something needs to be done. He called for wiping out at least the first $50,000 of student loan debt. By doing this, it would tremendously spur on economic growth. Around $900 billion worth of this type of debt would evaporate, freeing millions of Americans from its burden. They would then use that money on better things, stimulating the economy.
“As a banker, you recognize problematic situations and you deal with it through write-offs,” Johnson, who formerly worked at financial companies including First Data Corp. and Visa Inc., said in an interview. “From an economic standpoint, it is absolutely the right thing to do.”
The Student Loan Crisis
While Johnson is a registered Republican, he is joining sides with presidential candidates Bernie Sanders and Elizabeth Warren on this issue. They’re calling for complete student loan forgiveness. There’s a growing movement around this debate. There’s a large and growing number of Americans who feel the cost of a college education isn’t worth the boost in earnings by obtaining a degree.
Johnson feels as if republicans are also going to join the fray. He agrees with the numbers that says a 1% tax on employers’ earnings would get the job done. While many don’t want a new tax, it would be much better than what’s happening right now. There’s a growing student loan default rate, meaning the government isn’t getting what it’s owed.
“Like millions of Americans, every day he woke up owing more than the day before,” Johnson said. “That’s when I said, ‘This is nuts.’” It’s unknown as of yet what will happen. Will 44 million Americans with student loan debt vote Democrat just to get out from under the debt? Will there be a fight in the House or Senate over forgiveness? We can only wait and see.
