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."

Wayne Johnson at the Gables of Wolf Creek, the retirement community he owns in Macon, Georgia Annie Nova | CNBC

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."

It could be argued that we border on predatory. Wayne Johnson former Education Department official