Fall Behind On Your Student Loans? You Could Lose Your Job

Image result for Fall Behind On Your Student Loans? You Could Lose Your Job forbesOver 44 million Americans carry student loan debt and almost the same number of people need to get a government-issued occupational license to work. And currently, 15 states allow licensing boards to revoke the occupational licenses of workers who fall behind on their student loan payments . This authority can extend to any job that requires a professional license—including teachers and nurses—putting millions of Americans in jeopardy of losing their jobs and falling into government dependency.

Today, Senator Marco Rubio (R-FL) and Senator Elizabeth Warren (D-MA) announced that they are reintroducing the Protecting JOBS Act, which would prevent state licensing agencies from taking away occupational licenses from workers who fall behind on their student loan payments.

In the following interview, Senator Rubio shares why he is passionate about this reform and why these laws have been rightly labeled the “debtors’ prison of our time.”

Jared Meyer: With everything going on in Washington, why did you decide to focus on changing this policy?

Senator Marco Rubio: I am always looking for ways to empower individuals to pursue dignified work. After reading a New York Timesarticle on the topic November 2017, I wanted to provide a remedy—especially knowing that I voted for a bill while in the Florida legislature that allowed the state to suspend professional licenses of those who defaulted on student loans. I think a good quality of any policymaker is to admit when a policy is not having the intended result and to commit to changing it.

Meyer: This reform seems to be common sense. Did you encounter any opposition when you first introduced this bill last Congress?

Rubio: Even the most common-sense reforms in Washington are met with skepticism, and this proposal is no different. Much of the concern stems from those who are worried that we are taking away an incentive for borrowers to repay their loans. However, we still allow the Department of Education to garnish wages to recoup payments. This bill simply eliminates a step before the penalty of wage garnishments where borrowers lose their professional licenses, and thus their ability to earn an income. It makes a lot more sense to let borrowers keep their jobs than to take away their licenses , which would only lower the chances that they can catch up on their loan repayments. Importantly, borrowers are still responsible for paying off the costs of their loans under my bill.

Meyer: To add to your point, data show that taking away licenses from individuals who are late on their student loan payments does not lower default rates . In 2015, the most recent year with available data, 22 states could take away licenses from people who fell behind on their student loans. The average student loan default rate in these states was 10.9%. This was higher than the average of the states that did not have this policy in 2015, which was 10.7%.

Are there other reasons why you are committed to changing these misguided laws?

Rubio: A major concern I have is the possibility that borrowers who have their licenses revoked will fall behind on other loans or bills, like rent or childcare. To maintain their ability to work, borrowers could easily go into more debt elsewhere. There is no dignity there. The Protecting JOBs Act keeps people in their jobs, out of poverty, and off of welfare .

Meyer: The days of states taking away licenses from those who fall behind on their student loans are numbered . Even if the Protecting JOBS Act fails to become law, the attention Senator Rubio and Senator Warren brought to this issue is already leading to changes on the state level. Recently, Alaska, Illinois, New Mexico, Virginia, and Washington all passed bills to end this practice. And similar bills are moving in Arkansas,Georgia, Kentucky, and Texas this year. All this attention is a positive development for the millions of Americans who may fall on tough financial times.


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