- #STATES REVOKING LICENSES OVER STUDENT LOAN DEFAULTS HOW TO#
- #STATES REVOKING LICENSES OVER STUDENT LOAN DEFAULTS LICENSE#
Wages can be garnished, liens can be placed on property, and tax returns and Social Security payments can be seized. As it stands, institutions can recoup loans in various ways. The truth is that the revocation of licenses doesn’t guarantee that loans will be satisfied, and it is not the only method of recovering missed payments. View Gallery: Charlie Daniel cartoons - August 2018 Others have had to choose between student loans and basic necessities, like medical expenses, utility bills and even housing.
Oftentimes, individuals will take out additional debts - such as credit card debt - to satisfy their outstanding student loans as a vicious cycle of increasing debt spirals out of control.
#STATES REVOKING LICENSES OVER STUDENT LOAN DEFAULTS LICENSE#
It can be even more damaging to individuals suffering from ailments because once they are stripped of their license and their occupation, they can also lose their health insurance.Ĭertainly, numerous people who have faced licensure suspensions have repaid their obligations, but in doing so, many have gone to extreme and inadvisable lengths. How can someone be expected to repay a debt if they cannot work? Indeed, as Otto discovered, it is exceedingly difficult to satisfy outstanding debts without a job. Suspending occupational licenses for defaulting on loans is illogical and harmful.
The law applies to any pre-2010 student loans, which comprise about 30 percent of the student loan market. Department of Education explicitly urged states to adopt these laws in 1990, although Tennessee did not heed this call until 1999 (it began aggressively enforcing it in 2009). States started enacting these types of license revocation laws in the 1980s and '90s in response to the federal government encouraging states to step up their student loan collection efforts.
#STATES REVOKING LICENSES OVER STUDENT LOAN DEFAULTS HOW TO#
Watch Video: How to submit a letter to the editor Considering that other viable debt collection methods are available, the legislature ought to repeal this punitive authority.
In reality, however, this policy is misguided. The rationale for such a statutory penalty is to deter graduates from neglecting their loans and to encourage those in default to repay their debts. Last year, it happened to around 283 people whose licenses fell under the Department of Commerce and Insurance, and from 2009 to 2015, the Volunteer State suspended around 4,200 licenses total. This authority is frequently invoked in Tennessee, which is one of the most aggressive states in the country when it comes to license suspensions.
Unfortunately, Shannon’s experience in Tennessee isn’t unique. Tennessee is one of 18 states that can suspend individuals’ occupational licenses for falling behind on their federal student loan payments. Without the appropriate occupational license, she could no longer work as a nurse, and Shannon’s nightmare quickly worsened. She understandably focused on her medical bills.Īfter defaulting on her student loans, the state mailed her a notice announcing that her nursing license had been revoked. Eventually, she was forced to choose between paying her medical expenses or her nursing school loans. While battling debilitating seizures, she frequently missed work and her medical bills quickly piled up. Shannon Otto was a 30-year-old, Nashville-based nurse and mother of two when she unexpectedly fell ill with epilepsy.
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