Ex-Trump official calls student loans ‘insane,’ saying Republicans need to embrace forgiveness

To fill the void of federal student loans, Johnson proposes to give every high school graduate a $50,000 education “voucher” that they can apply to a college or a vocational program. He would maintain Pell Grants, which typically go to students from families with an income below $20,000, and add other grants, too.

Other funding sources for students, he said, could include private lenders and income-sharing agreements, in which investors provide students money to pay for college in return for a share of their future income.

The Roosevelt Institute’s Margetta Morgan said she was concerned Johnson was using the problems of the federal government to try to enrich private companies. “He got it right on student debt cancellation, but wrong on everything else,” she said.

Critics of Johnson’s plan also point out that many of the challenges to the federal student loan system actually stem from private companies, including for-profit colleges and the student loan servicers like Navient, which is currently being sued by several states for misleading borrowers.

And while the student loan forgiveness proposals from Democrats aim to make the country’s higher education system less reliant on debt, Johnson’s plan seems to just exchange one kind of debt for another, Margetta Morgan said.

“Private sector lending has been far worse and far more expensive for borrowers,” she said.

However, with Johnson’s proposed grants, most students should be able to cover their college costs without borrowing, Kantrowitz said. Although, he admitted: “If you want a higher-cost college education, you’ll have to pay for it yourself.”

Despite the different visions for student debt forgiveness by Johnson and Democrats, the fact that members of both parties are behind the platform will help it gain traction, experts say.

“I don’t endorse his ideas for the future,” Morgetta Morgan said. “But we should not discount that this is an official who was intimately involved in the student loan system and is saying, ‘It’s not working.'”

Asked how he’s going to make his case for debt cancellation to those on the right, Johnson said it was simple.

“You say, ‘I’m a Republican,” he said, clenching his fist, as if it were a gavel, and striking the table, “‘and I’d like to tell you some truth.'”

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Article source: https://www.cnbc.com/2019/10/31/student-debt-forgiveness-could-become-a-bipartisan-issue.html