Fall behind on your student loan payments…. lose your job?

Money to go to school!…..

Student Loans!….

Trouble?….

Few people realize that the loans they take out to pay for their education could eventually derail their careers. But in 19 states, government agencies can seize state-issued professional licenses from residents who default on their educational debts. Another state, South Dakota, suspends driver’s licenses, making it nearly impossible for people to get to work.

As debt levels rise, creditors are taking increasingly tough actions to chase people who fall behind on student loans. Going after professional licenses stands out as especially punitive.

Firefighters, nurses, teachers, lawyers, massage therapists, barbers, psychologists and real estate brokers have all had their credentials suspended or revoked.

Determining the number of people who have lost their licenses is impossible because many state agencies and licensing boards don’t track the information. Public records requests by The New York Times identified at least 8,700 cases in which licenses were taken away or put at risk of suspension in recent years, although that tally almost certainly understates the true number….

By the late 1980s, the government’s losses climbed past $1 billion a year, and state agencies started experimenting with aggressive collection tactics. Some states garnished wages. Others put liens on borrowers’ cars and houses. Texas and Illinois stopped renewing professional licenses of those with unresolved debts.

The federal Department of Education urged other states to act similarly. “Deny professional licenses to defaulters until they take steps to repayment,” the department urged in 1990….

“I really do want to pay the loans back,” she said. “How do you think I’m going to be able to pay it back if I don’t have a job?”….

More…

Share on Facebook

Leave a Reply

Your email address will not be published.