MACON, Georgia — As the head of student loan debt at the U.S. Education Department, Wayne Johnson discovered some people had balances of more than $1.5 million.
"I'll never forget it," Johnson, 67, said, during an interview with CNBC on Sunday night at a gated retirement community he owns here. "There were lots of folks in the $500,000 range, and $250,000 is not an uncommon number."
He saw a lot of other things that disturbed him.
More than 40% of student loan borrowers — or more — might never repay their debt, Johnson said. And the current $1.6 trillion portfolio of outstanding debt could swell to $5 trillion.
"The system is designed with no checks," Johnson said. "The fabric of America is being destroyed through this process."
It was his findings from inside the department that pushed Johnson to make his announcement last month that most of the country's outstanding student loan debt should be canceled. "The Department of Education is the largest consumer financial lender in the world, and we're the most — in my opinion — irresponsible," he said.
The Education Department did not respond to a request for comment.
Johnson proposes to forgive $50,000 in student debt for all borrowers. The plan would be paid for with a 1% tax on revenue generated from corporations and nonprofit organizations, Johnson said.
Concurrent with his announcement, Johnson submitted his resignation letter to Education Secretary Betsy DeVos and said he would seek to fill a U.S. Senate seat in Georgia. "I wanted to take this opportunity to amplify the issue," Johnson said.
For more than two years, Johnson worked inside the Education Department and saw the student loan situation up close. He describes the system in sinister terms, saying that it is crippling people's financial lives and "absolutely unsustainable."
The Education Department relies on a number of tools to make "it appear on the government books that everything is performing as agreed," Johnson said.
Those methods include allowing students to postpone their payments with so-called deferences and forbearances and enrolling them in repayment plans that cap their bills at a share of their income.
While these programs might keep down defaults, they cause borrowers' balances to balloon with interest, Johnson said. He estimates that more than 75% of people with student loan debt wake up owing more than they did the night before.
"Student and parent borrowers are getting crushed," Johnson said. "It could be argued that we border on predatory."
The fact that there's now a Republican publicly pushing for student debt forgiveness will help the proposal gain traction, experts say.
"[T]his is an official who was intimately involved in the student loan system and is saying, 'It's not working,'" said Julie Margetta Morgan, a fellow at the liberal Roosevelt Institute.
Johnson also believes it should be easier for people to discharge their student loans in bankruptcy. Currently, borrowers have to exhibit a "certainty of hopelessness" to walk away from their student debt in court.
"Every day, the federal government is sending out Social Security checks to seniors, and we're sending out collection notices to many of those same seniors," Johnson said. "Many say, 'How can I get out of this purgatory? Can I bankrupt out of it?' The answer is 'No.' That's when you know you have a very serious problem."