A former Trump Department of Education official is calling on Congress to extend CARES student loan relief until December 31, 2021. Dr. A. Wayne Johnson served in a number of roles under Secretary of Education Betsy DeVos, including serving as the state senior student loan officer serving as chief executive of the federal student grants office.
Johnson, who resigned last year to run for the open Senate seat in Georgia, wrote to Senators Mitch McConnell and Chuck Schumer with recommendations for the next coronavirus relief package. In his press release, he called for the student loan payment hiatus to be extended: “People need time to plan their lives, and Congress needs time to bring federal college funding reform into effect.”
The campaign added that wage garnishment and offsetting by state treasuries should also be suspended. Johnson also said the non-repayment timing should count towards the Government Loan Funding Program (PSLF), as it did under the CARES Act.
Johnson made other suggestions in his letter. He added that all bankruptcy student debts should be deductible. The Senate candidate also said federal student loan debt records should be removed from a person’s credit bureaus.
He also said Congress shouldn’t provide for debt relief at this time, but before Dec.
On his way out of the Trump administration last year, Johnson raised many eyebrows when he called for the cancellation of up to $ 50,000 in student loan debt for borrowers and said he would make the issue a cornerstone of his campaign.
He said that after monitoring the loan portfolio, he realized the problems with the student loan system and that most borrowers would never repay their loans – an unproven claim that is widely denied by student loan experts. Going forward, he said he would provide a $ 50,000 grant to pay for college or trade school.
While some who support student debt relief were excited that a Republican would support the idea, many were skeptical of his plan. Some thought it ignored taxpayers’ interests, but more worrying was that it was a Trojan horse that allowed more private and / or less affordable student loans.
That’s because the remaining debt of borrowers over $ 50,000 should be moved to an Income Sharing Agreement (ISA) – another type of student debt where borrowers agree to pay a portion of their future salaries. ISAs are a different type of private student loan and often have less favorable repayment terms and protection than federal student loans.
Johnson says his proposed ISAs are “federal” so they probably wouldn’t be private. However, his plan also says the federal government would get out of the student loan business forever. But even if its ISAs were federal, this begs the question of how they differ from the income-based repayment plan now in existence. Would they have other – and possibly less favorable – conditions?
Johnson’s plan did not go through with many in the Republican Party or in his race. On the Republican side of the race, the top two candidates are Congressman Doug Collins and seated Senator Kelly Loeffler. Johnson was not included in recent polls for the race. When it was inducted, it was in the low single digits.
Trump’s proposed arrangement raises questions for student borrowers
The CARES Act helps most student borrowers make loans
The Senate GOP wants stimulus checks, but no student loan relief
What the coronavirus stimulus means for your student loans
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