Last week, yet another unknown figure put his name into the pot for the U.S. Senate sweepstakes set up by Gov. Brian Kemp to replace Johnny Isakson in Washington.
But unlike several hundred other unknowns, A. Wayne Johnson of Macon — the “A” is for Arthur — immediately began a multi-media round of national interviews. The Wall Street Journal, Forbes magazine, the Washington Post, MSNBC, Bloomberg, Politico.com, CBS, and Inside Higher Ed magazine — all wanted a piece of him.
That’s because 15 minutes before he became a candidate, Johnson, 67, was a Trump administration official who began his first and only stint in federal government as an overseer of the $1.5 trillion federal student loan portfolio — a collection of debt, compounded interest and dashed hopes that makes up 7% of $22 trillion in federal public debt.
“About six months ago, I realized that all I’m doing is making a very, very flawed system work more efficiently. I’m creating the mechanism whereby people are going to get into this state [of debt] in a more streamlined fashion. And it began to worry me,” Johnson said in yet another interview with me.
Johnson may be the only Republican now campaigning to remake the way this nation finances higher education — a plan that would include forgiveness of up to $50,000 in student debt, regardless of income.
Johnson is indeed campaigning. That barrage of interviews mentioned above? Over the last three years, we’ve seen such efforts in Washington, aimed at an audience of one – i.e., President Donald Trump.
Johnson’s audience of one is Brian Kemp, the only fellow whose vote counts in the race to fill Isakson’s shoes.
Johnson considers himself a well-vetted Republican. He speaks with pride of his work for the Trump administration and his immediate boss, Education Secretary Betsy DeVos. But he has met the governor only once — just long enough to shake hands.
Now Johnson is campaigning for 30 minutes of Kemp’s time, to make his case that, on behalf of Republicans everywhere, he can steal away an issue now lodged in the bosom of every Democratic presidential candidate – and deliver debt-burdened millennials to the GOP.
Johnson didn’t phrase it so, but the fact that his plan would erase $53 billion in student loans owed by Georgians could also prove helpful to a governor seeking re-election in, say, 2022.
Student loans guaranteed by the federal government, as well as many private loans for the same purpose, are the walking dead of the financial world. Social Security payments can be garnished to satisfy them. Income tax refunds can be withheld. Assets can be seized without courtroom drama.
Excessive college debt has dampened a generation’s appetite for home ownership. It has eliminated retirement savings, condemning millions of those aiming for the middle-class to a never-ending life of work.
Most important, these are debts that – by law — cannot be killed with declarations of bankruptcy.
“If the governor appoints me, the first week I’m in office, I’m going to get all the negative information off people’s credit files,” Johnson said. “We can do this by presidential executive order, and the White House knows this (Trump has not weighed in on the matter). Right now, I know that millions of people have unfair information in their credit files, that’s causing them to pay more in car loans, on apartments.
“Within the second week in office, I would introduce legislation to make all student loans, government and private, fully dischargeable under bankruptcy,” Johnson said. (He acknowledged that ending protection for private loans may require a longer glide path).
“I can have all this on the table before we even hit the 2020 election,” Johnson said. “This is where Republicans can really grab the bull by the horns. This is the one issue that affects one in every five people above the age of 18 in America.”
On her campaign swings, Democratic presidential candidate and senator Elizabeth Warren of Massachusetts has pitched up to $50,000 worth of forgiveness, but with income restrictions. Her plan would be financed with increased taxes on the wealthy.
Johnson’s plan would go further, but in a more Republican manner. “The federal government should be out of the student loan business,” he said.
There is much about the federal financing of college educations for fiscal conservatives to dislike. First, Congress has set no cap on how much money can be doled out. “It’s an unlimited demand meeting an unlimited supply,” Johnson said.
Lifetime loans for undergraduate degrees are pretty much capped at $57,000 per individual. But loans for graduate degrees have no limit. “It’s a ticket that lets you go wherever you want to go, consume whatever you want to consume, and quite frankly, be fully funded by the federal government,” he said.
Debts of $1 million aren’t uncommon. Debts of $250,000 are very common. Yet only 25 percent of loan recipients are reducing principle with regular payments, he said.
Many borrowers have been too trusting of their government. “What they actually get into is an incredibly unorthodox loan situation that allows for the compounding of interest such that you could start off with $40,000 in debt, and just because of the interest accumulations and deferments, you could wind up owing $120,000 after ‘x’ period of time,” Johnson told one interviewer this week.
The Republican’s proposal would offer all students a $50,000 grant for their undergraduate college education – or other occupational training and licensing. Those who have already paid their student loan debts, or took out no loans for their college degree, would receive tax credits up to $50,000.
That operation would be financed by a 1% tax on revenue generated by all employers – including non-profit organizations. These corporations are receiving a product – i.e., an educated workforce – that they aren’t paying for, Johnson said.
Grad school education could be financed with loans from private businesses in search of good hires, or income-sharing agreements.
Johnson’s roll-out has gone smoothly, save for one hiccup. On the day after he announced his Senate bid, his former boss, Betsy DeVos, was in a Fox News studio discussing the state of education in the U.S.
Host Bret Baier didn’t mention Johnson, but pointed to loan-relief plans pitched by Democrats.
“Their proposals are crazy – I mean, trillions of dollars,” DeVos said. “And 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 said that he hasn’t yet discussed his own plan with DeVos but looks forward to explaining it to her.
He might also want to shoot a tad higher – rather than 30 minutes with Governor Kemp, Johnson may need the full hour.
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