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. Continue reading