Bill Proposed Prohibiting Agencies from Revoking Professional Licenses of Student Loan Defaulters

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Summary: A new bill introduced would prevent states from punishing those with student loans who cannot pay by revoking their professional license or driver’s license.

Nineteen states allow government agencies to take a person’s professional license and even driver’s license away if they don’t pay their student loans, according to Law.com. U.S. Sens. Marco Rubio and Elizabeth Warren introduced a bill that will prohibit states from revoking professional and law licenses from student loan defaulters.

  

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The Protecting Job Opportunities from Borrowers Act could serve as an important bill for lawyers drowning in student loan debt but at risk of losing their ability to practice law and make money. If the bill passes, in two years states will no longer be allowed to revoke licenses due to loan defaults. Defaulters will also be able to file for injunctive relief in states do not comply with the new law.

Warren said, “State governments punishing people struggling with student loans by taking away drivers’ and professional licenses is wrong. These policies don’t make sense, because they make it even harder for people to put food on the table and get out of debt.”

Rubio called the current conditions a “Catch-22” where people are struggling with money and then getting their ability to make money taken away so now they are even deeper in financial trouble.

There is no complete data on the number of attorneys that have been affected by their student loan defaults by having their law licenses revoked. Law schools that are part of a university have their numbers included with the university so standalone law schools end up being the only ones that submit direct data to the U.S. Department of Education. Of the 23 standalone law schools, the number of graduates who defaulted over the time of two years ranged from .2 percent to 4.8 percent.

Similarly, state agencies don’t generally track or report the number of licenses they revoke for student loan defaults, according to The New York Times. The Times uncovered 8,700 cases of people losing their professional licenses but feel that the real number is much larger since it includes all professions like nurses, teachers, barbers, real estate brokers, lawyers, and more.

Some of the states that currently allow licenses to be revoked include California, Texas, Florida, Georgia, and Massachusetts. One former Houston lawyer, Frank Santulli III, had his law license revoked in 2009 when he was unable to pay his student loans and other debts. The Texas Southern University Thurgood Marshall School of Law graduate had around $67,000 in outstanding debt at the time. He now works as a mediator. Santulli is still working on restoring his legal career after having it revoked.

Santulli said, “I remember when my issue first came to light, medical doctors and other professional licensed individuals were in great disbelief that an agency could revoke a license. Basically, in most professions which require a state license, there are and can be many other ways a state can monitor professional or moral conduct. Revoking someone’s professional license for past debt, slow pay, or student loan default is more punitive and not curative or rationally related.”

Do you think government agencies should be able to revoke someone’s driver’s license or professional license for not paying their student loans? Share your thoughts with us in the comments below.

To learn more about student loans, read these articles:

• American Bar Foundation Discusses State of Student Loan Programs
• How Can You Get Your Law School Student Loans Forgiven?
• How Does the Navient Student Loan Scandal Affect You?

Photo: pixabay.com