Student loan debt has reached astronomical highs in recent years, and now, The New York Times is reporting on a phenomenon that’s making it even harder for borrowers to keep up. In 19 states, when you fail to keep up with your student loan payments, government agencies can seize state-issued professional licenses. In a 20th state, South Dakota, it’s legal for the state to suspend a person’s driver’s license, making it all but an impossibility to commute to and from work.
Debt collection actions surrounding student loans have been increasingly punitive, but these types of measures – those that threaten a person’s livelihood – make it all the more difficult for them to pay it off, not to mention provide for themselves and their families. It puts them at risk of bankruptcy and foreclosure. These professionals range from teachers to nurses to attorneys to firefighters to psychologists – all of whom have been stripped of their credentials that allow them to maintain a job in their field.
The Times reported there were at least 8,700 cases they could identify, but that’s almost certainly a low-ball figure because the majority of licensing boards and state agencies don’t track this type of data.
In one example highlighted by the journalists, a nurse in Tennessee fell behind on her payments after 10 years in the field, when she started to suffer from seizures. She was unable to work for a time, and thus unable to make payments. Although she eventually got her health woes under control, she was not able to return to work because the state board of nursing suspended her license. If she wanted it back, she’d have to pay $1,500. Unable to get another loan to pay that, she’s been unable to return to work.
This problem is only going to continue to pose problems, as student loans are now the No. 2 source of household debt, just behind mortgages. So too are the number of defaults.
Lenders have long taken to harsh tactics, including lawsuits, wage garnishments, enforcing liens on property and tax returns. However, this new measure is largely being enforced by the state and federal government.
Those who support such measures say it’s for the benefit of taxpayers, given the fact that most of these loans are backed by the government, which has to pay when former students default. The logic is that if borrowers are faced with the possibility of not being able to work, they will find the money. However, those who oppose this strategy – like our Miami student loan debt attorneys – know it is tantamount to pushing a lot of these borrowers off a proverbial cliff when it comes to their finances.
And more than just losing a job, it’s losing the ability to work. Borrowers’ credit tumbles. They are hounded by collection agencies. They have liens on their property. Some question why it’s necessary when other effective measures exist. Such efforts are extremely short-sited when you consider you are taking away people’s ability to be gainfully employed, making it even more difficult for them to dig themselves out of the financial hole than they were to start. Presumably, if these professionals had the money to keep up with payments to begin with, they wouldn’t be in this situation.
Our debt defense attorneys work tirelessly to help those who have fallen behind on student loan payments.
If you’re battling debt collection in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.
When Unpaid Student Loan Bills Mean You Can No Longer Work, Nov. 18, 2017, By Jessica Silver-Greenberg, The New York Times
More Blog Entries:
Student Loan Lawsuits Can Fail on Several Grounds, Nov. 16, 2017, Miami Student Loan Debt Defense Attorney Blog