“It’s an attention getter,” TSAC’s chief aid and compliance officer stated, in discussing the effort. In one month alone, 42 Tennessee nurses lost their licenses as a result of these state regulations.
#STATES REVOKING LICENSES OVER STUDENT LOAN DEFAULTS PROFESSIONAL#
Tennessee has proven particularly aggressive: from 2002 to 2017, officials from the Tennessee Student Assistance Corporation (“TSAC”), the state-run entity responsible for enforcing the law, reported more than 5,400 people to the state’s professional licensing agencies.While 84 nurses eventually paid off their loans, the three that could not no longer work in the medical field. This was an increase of around 11.54% from 2016, and approximately 50% of these nurses were first-time defaulters. In one state with an acute nursing shortage- Louisiana-the statewide nursing board notified 87 nurses that their defaulted student loans would bar renewal of their licenses in 2017.However, a review of the records of licensing boards throughout the Bluegrass State revealed that the licenses of 308 nurses and 223 teachers were revoked in recent years for student loan default. For its part, Kentucky does not track how many default notices it sends to licensing agencies.Still, efforts to date to formally abolish this statute have failed. Indeed, the Iowa College Student Aid Commission, which once collected federal loans in the state, retreated from encouraging revocation after transferring its student loan portfolio to a private servicer. Yet, state officials denied that the law has been recently used. In 2012, more than 900 driver’s licenses had been temporarily suspended in the Hawkeye State for failure to pay student loans. Iowa, for instance, allows for the revocation of any state-issued license, including a driver’s license.Third, variations in coverage and enforcement abound, as the following examples show: Second, the average debt for members of the Class of 2014 likewise varies considerably, reaching as high as $31,579 in Minnesota and dipping as low as $21,382 in California. First, the average default rate is a study in contrasts, with a low of 6.4% in North Dakota and a high of 15.1% in Mississippi. Accordingly, depending on the jurisdiction, they can affect health professionals, veterinarians, attorneys, engineers, psychologists, teachers, and even barbers.įor all their similarities, these laws have different effects across these diverse states for three reasons. Typically, these laws apply to any profession that requires a worker to have a license, certificate, registration, or approval to legally work in the state. Department of Education handbook urged states to enact legislation that would “eny professional licenses to defaulters until they take steps to repayment.” This advice was followed by twenty-two states. The federal government originally encouraged the emergence and proliferation of these laws. In 1990, a U.S. Many, if not all, date to an era before the federal government assumed its preeminent role in the student lending market. Some of these provisions have been in place for 20 years or longer. These jurisdictions span the country, both ideologically and geographically: As of March 23, at least 19 states hold or revoke the state-issued licenses of teachers and/or other professionals if the borrower is in default on their student loans.
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