ATLANTA — Democratic presidential candidates promised to cancel student debt while visiting Atlanta last month. For Georgia, that would mean more than $60 billion.
According to the Office of Federal Student Aid, housed under the U.S. Department of Education, nearly 1.6 million Georgia students are saddled with $60.7 billion in federal loan debt as of data from June.
A majority of students — about 20% — owe between $20,000 and $40,000 in debt. Although a small percent, about 36,600 Georgia students, owe more than $200,000 in student debt.
In Georgia, 35- to 49-year-olds owe the most, a price tag of more than $25 billion. The age range with the highest number of loan borrowers is 25 to 34 years old, about 517,000 students.
At the same time as Democratic presidential candidates tout their plans to deal with student loan debt, ex-Trump official and Georgia resident, Wayne Johnson, 67, resigned from his high-profile U.S. Department of Education position, eyeing the state’s soon-to-be open Senate seat, running on a campaign of mass student debt forgiveness.
Dems on debt
A staple in Vermont Sen. Bernie Sander’s campaign, Democratic candidates have followed suit in announcing higher education plans and proposals that include various formulas for “free college” and student debt cancellation.
Candidates targeted young, black voters with events held at Historically Black Colleges and Universities and historically black spaces during their Atlanta tour.
During a rally at Morehouse College Nov. 21, Sanders promised the young crowd if he were to be elected president, he would make all public colleges and universities tuition-free and to cancel all student debt. At the same time, Sanders unveiled his plan to funnel $10 billion into the HBCUs.
At an event honoring historic black women, Massachusetts Sen. Elizabeth Warren laid out her higher education proposal that she said would cancel 95% of student debt and dedicate $50 billion to funding for HBCUs.
Warren said her student debt cancellation plan “will help close the black white wealth gap” in America. The proposal gives $50,000 in loan forgiveness for students who fit income requirements.
South Bend, Ind., Mayor Pete Buttigieg told black students at Morehouse College his newly introduced higher education plan would make college free for roughly 7 million students who are eligible for federal Pell Grants and increase funding for HBCUs and minority-serving institutions by $25 billion to “help level the playing field.”
California Sen. Kamala Harris announced plans earlier in her campaign to erase up to $20,000 in student debt for students who meet a series of criteria. Other candidates have released a series of possibilities on refinancing student debt, but not as vocally as their more progressive rivals.
Ga. Republican calls for forgiveness
Johnson said the Democrats’ plans create a “morale hazard.”
“After canceling the debt, you keep loaning out money and you get people back in the same situation,” Johnson said.
Betsy DeVos’ former deputy, Trump administration staffer and a Republican, Johnson resigned from his post at the department of education in October, citing the “fundamentally broken” student loan system. Johnson oversaw the nation’s trillion-dollar student loan portfolio.
The Macon resident who threw his hat in the ring for Johnny Isakson’s open Senate seat is campaigning on a plan that would wipe $53 billion of Georgia student loan debt clean.
Johnson said he resigned his post after realizing there are students who owe the federal government a million dollars or more in loans.
“I thought ‘this is nuts,’” he said, “'how is it even feasible that somebody could owe us a million dollars?'”
The system traps people in compounding debt, he said, especially for low-income and rural families. It has created an unsustainable system.
While there is a $57,000 cap for independent students taking out loans, there are no loan caps for parents or grandparents taking out loans on behalf of their students to attend college, Johnson said. There also aren’t loan caps for graduate programs.
“Now, the reality of the situation in Georgia, in rural Georgia,” Johnson said, “you have grandmothers that are getting their Social Security checks and those Social Security checks are being garnished because of them having signed up for loans for their grandchildren.”
The only way a person ever gets out of a student loan, he said, is upon death. Getting an education — meant to help climb the economic ladder — is now “shackling you for decades.”
Johnson agrees with Democrats that student debt needs to be cancelled — but the Republican said lawmakers need to go further in fixing the system.
He has proposed a plan entailing $50,000 loan forgiveness per student, a $50,000 education allowance for every high school graduate regardless of income and a $50,000 tax credit for students who paid their way through college without loans or have paid their loans off fully.
The plan would be financed by a 1% tax on revenue generated by all employers — going against traditional Republican opposition to tax increases to fund such programs.
The new system would create equity, he said, and give parents a peace of mind for their children.
“Parents have been told and taught that the only way your children are going to advance is that they go to get a college degree, which can make a million-dollar-a-life difference,” he said, “yet they don't know how to how to pay for it. Are you going to take a mortgage on the house? Do you put it on your credit cards? Do you tap into your savings?”
The other big issue with Democratic proposals, Johnson said, is the idea of only making tuition at public colleges and institutions free.
Sanders' plan for “free college” — similar to Warren’s — relies on state money covering tuition costs first and federal money filling in the left-over costs, Johnson said. The proposal would force state’s to reinvest in public institutions and sky-rocketing prices to attend private colleges.
“Federal funds going only into public institutions is the worst possible thing that can happen because number one: there's not enough capacity in those systems,” Johnson said. “And number two: if somebody chooses for whatever set of reasons to not attend a public institution, it would be prohibitively expensive, and they would not have access to funding.”
Johnson said he hopes a potential seat in Congress will help change laws to fix the federal student loan system. Change will only happen if Republicans step up to address the problem, he said.
“Democrats will solve the problem for the moment but get us back into that same hole going forward,” he said. “Republicans will bring the fiscal responsibility and the physical oversight to make sure that we don't get into that problem again.”