The Wall Street Journal and the Atlanta Journal-Constitution reported today that A. Wayne Johnson said he intends to resign from the Department of Education to seek appointment to the U.S. Senate seat held by retiring Sen. Johnny Isakson. Johnson, 67, and a Republican, also said he would endorse the cancelation of most outstanding student debt held by the Federal government.

Johnson’s journey with ED began in June 2017 when Secretary Betsy DeVos announced her intent to appoint him as Chief Operating Officer for Federal Student Aid. Previously, he held positions at VISA USA, Providian Financial, and First Data Corporation, and was CEO of First Performance Corporation and Reunion Student Loan Finance Corporation. DeVos said at the time,

"Wayne is the right person to modernize FSA for the 21st Century. He actually wrote the book on student loan debt and will bring a unique combination of CEO-level operating skills and an in-depth understanding of the needs and issues associated with student loan borrowers and their families. He will be a tremendous asset to the Department as we move forward with a focus on how best to serve students and protect taxpayers." 

The term for the position was expected to be five years. However, in January 2018, Secretary DeVos announced that Johnson would instead take on the leadership of a new unit called the Office of Strategy and Transformation. His primary responsibility in this role would be to implement the Next Generation Processing and Servicing Environment (NextGen) for student loans.

Johnson’s term at ED was a tumultuous one for private debt collectors, who sued the Department over what they felt was a botched solicitation for large PCA services. The litigation that began in 2015 did not start on Johnson’s watch, but it did end there.

That Johnson is a Republican and would call for the forgiveness of all student loans is interesting because this argument has been the domain of such progressives as presidential candidates Sen. Bernie Sanders and Sen. Elizabeth Warren.  Johnson told the Atlanta Journal-Constitution that he would be the kind of conservative Republican who works across the aisle.

Sen. Isakson’s seat will initially be filled via appointment by Georgia’s Governor, Brian Kemp, and would then be up for election both in November 2020 and 2022.

insideARM Perspective

This departure is a significant development. A. Wayne Johnson was the mastermind behind the NextGen system that is expected to revolutionize the way Federal Student Aid services borrowers. We will see whether other exits from his team follow his departure and whether the loss of his leadership will change the implementation schedule.  

Or, as I digress for just a moment, can you imagine a Sanders/Johnson or Warren/Johnson cross-party ticket that wins on the basis of eliminating all student debt? Perhaps someday NextGen will be moot.

UPDATED 12:55 PM 10/24/19: 

It seems (and sources tell me) that this departure has been in the works for some time. Johnson has launched this website for his Senate campaign, with "the battle to end student debt" as his cornerstone. According to a press release published today,

[H]is plan would provide students with a $50,000 grant for their college education wherever they attend, including both public and private colleges. The grants would also cover work training, professional licensing and vocational and trade schools. Those who have current debts would see the money owed reduced by up to $50,000. Those who paid their debts in the past would receive income tax credits up to $50,000. The program would be funded with a 1% tax on revenue generated by all employers including corporations and non-profit organizations. He would also seek to remove from credit bureau files all negative information related to federal student loans.


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