The Trump administration’s point person for overhauling the federal student loan system abruptly resigned Thursday after calling for the government to wipe out most of the nation’s $1.6 trillion of student debt. That, he said, would jump-start economic growth by eliminating more than $900 billion of federal student loans — and completely erase the debt for the vast majority of borrowers. More than 1.5 million people in the state collectively owe almost $61 billion on their federal student loans, U.S. Education Department data show. Nationwide, a 1% tax on employers’ earnings would provide more than enough funding to cover the government’s debt write-downs — losses that would result anyhow, Johnson said, because much of the nation’s student loan debt ultimately won’t be repaid. Second, he’d eliminate the federal loan program and replace it with grants to cover college tuition and work training and licensing programs.

Source: Los Angeles Times October 24, 2019 21:22 UTC