By Janet Haebler and Sam Hewitt
Last week, Sens. Marco Rubio (R-FL) and Elizabeth Warren (D-MA) reintroduced the Protecting JOBs Act (S. 609). Under the bill, any state that receives federal funding through the Higher Education Act would be barred from denying, suspending, or revoking an occupational license or a driver’s license “solely” because a borrower defaulted on their federal student loans.
As early as the 1990’s, states were urged by the U.S. Department of Education and select member organizations representing government, to adopt laws requiring regulatory boards to suspend professional licenses, and even driver’s licenses, if the board received notice informing them an applicant held outstanding student loans. Around 2010, at the height of this legislative trend, roughly half of states had some form of license suspension for default in place.
Although several states rescinded laws seizing or suspending licenses, barriers remain for some license holders. As of 2018, the National Conference of State Legislatures (NCSL) reports at least eight states—Alaska, Georgia, Hawaii, Iowa, Kentucky, Massachusetts, Tennessee and Texas—maintain laws requiring all occupational boards to revoke licenses for defaulting on any type of federal or state education loan. Louisiana will only revoke a license if the professional has defaulted on an education loan issued by the state. An additional five states—Arkansas, California, Mississippi, Minnesota and Florida—revoke only the licenses of health care professionals for defaulting on education loans. In Arkansas and Mississippi, the laws are more narrow, applying only to state health care education loans and scholarship agreements. Two states—Iowa and South Dakota—revoke all state-issued licenses, including driver’s and recreational hunting licenses.
According to the Institute for College Access and Success, 8.9 million federal student loan borrowers now in default with over 1 million borrowers added each year. With a continued increase in the percentage of Americans working in occupations requiring licensure, approximately 25%, combined with rising student loan default rates, there has been renewed interest. The Protecting JOBs Act is a bi-partisan effort at the federal level to address this counterproductive policy.
Watch for ANA updates and requests for grassroots efforts in the interest of advancing this policy. You can read more about this issue at Forbes.