Dr. Arthur Wayne Johnson, the private student loan company executive selected to head the Federal Student Aid agency (FSA), is affiliated with a company that a federal judge recently described as “very aggressive” about fighting efforts to discharge student loans, court records obtained by Diverse show.
While a student loan company might be expected to aggressively recover borrowed funds, observers say there could be conflicts of interest when a person affiliated with such a company is in line to run FSA. The agency serves 42 million student loan borrowers and administers more than $1.4 trillion in current outstanding federal student loan balances.
“The head of FSA doesn’t make policy, but they definitely implement it,” said Ben Miller, senior director for postsecondary education at the Center for American Progress, a think tank in Washington, D.C.
“And so it matters a lot, from picking contract winners (for servicing student loans) to deciding how tough or lenient to be on oversight, to what data become public, etc.” Miller said.
“I just feel like we don’t know much about this guy,” Miller said of Johnson, U.S. Secretary of Education Betsy DeVos’ recently announced pick to head FSA.
“It could be that he’s gonna be great. He could be terrible,” Miller said. “I feel like I’m not equipped to judge at the moment.”
A U.S. Department of Education spokeswoman said Wednesday that Johnson will separate from his company if he is appointed to FSA.
