╌>

Defaulting on a student loan could cost you your job in these professions

  

Category:  News & Politics

Via:  perrie-halpern  •  6 years ago  •  65 comments

Defaulting on a student loan could cost you your job in these professions
In 15 states, the failure to pay back student debt can result in the loss of your professional license

S E E D E D   C O N T E N T



It's no secret that student debt is an ever-growing crisis. Student loans have become the nation’s top category of personal debt — second only to mortgages — with borrowers owing a collective   $1.5 trillion . Nationwide, 44 million Americans have taken out student loans, while a staggering   8.5 million   federal student loan borrowers were in default last summer.

Default can invite severe consequences for borrowers, including garnished wages, withheld tax refunds, and a torpedoed credit score. And, though many people don't know, defaulting on student loans can even threaten a person’s career.

In 15 states, borrowers can have their occupational licenses suspended or revoked simply because they failed to pay back their student loans. That is no idle threat: A New York Times   investigation “identified at least 8,700 cases in which licenses were taken away or put at risk of suspension” due to default. For instance, one nurse in Nashville, who started suffering from epileptic seizures, couldn’t work temporarily and was forced to default on her loans, which resulted in the loss of her license and thus ability to work at all.

Stripped of their licenses, borrowers essentially lose their ability to earn an honest living. That spawns a vicious cycle that makes it even more difficult to pay back the debt that triggered the loss of their licenses in the first place.

Fortunately, there is a growing, bipartisan consensus that these laws are pointlessly punitive. This month, Illinois Gov. Bruce Rauner, R, signed a   bill   that bans any state government agency or board from suspending, denying or revoking a person’s license simply because they defaulted on their student loans. Illinois joined   Alaska   and   Washington , which also scrapped their default license suspension laws earlier this year.

Prior to reform, Illinois was one of the most aggressive states for enforcing its license suspension policy. According to records obtained by the Institute for Justice, Illinois suspended licenses for almost 2,300 workers across 50 occupations between 2005 and 2015, blocking credentials for more than 600 different cosmetologists, over 400 pharmacy technicians as well for barbers, counselors, nail technicians and social workers. Illinois even suspended the licenses for almost 500 different nurses, which, considering the nation’s   growing nursing shortage , is a deeply warped priority.

Although the policy was originally proposed as a way to limit defaults and collect on back debts, the Illinois Department of Financial and Professional Regulation couldn’t say how much student loan debt had actually been recovered after the department had suspended a borrower’s license. Little wonder then that even the Illinois Attorney General called the license-suspension policy  “nonsensical”  and backed its reform.

In Congress, Sens. Elizabeth Warren, D-Mass., and Marco Rubio, R-Fla., introduced a new   bipartisan bill   that would dramatically curtail this disastrous policy nationwide. Their Protecting JOBs Act would ban states from suspending, revoking or denying professional licenses and driver’s licenses “solely” because a borrower defaulted on their federal student loans. States would have two years to comply by reforming their laws or else they would risk the loss of any funding received under the federal Higher Education Act.

Read more at the seeded content


Tags

jrDiscussion - desc
[]
 
Perrie Halpern R.A.
Professor Principal
1  seeder  Perrie Halpern R.A.    6 years ago

I found this article interesting since it only seems to affect some professions and not others. Can we find a better way to handle defaults on school loans 

 
 
 
epistte
Junior Guide
1.1  epistte  replied to  Perrie Halpern R.A. @1    6 years ago

It also applies to engineers that require a professional license.

When do we wise up and subsidize post-secondary education like other intelligent countries do?  Betsy Devos is making this problem worse because she is looking out for the banks interest instead of the students.

 
 
 
Tacos!
Professor Guide
1.1.1  Tacos!  replied to  epistte @1.1    6 years ago
When do we wise up and subsidize post-secondary education like other intelligent countries do?

We've been subsidizing it, but in the most foolish way possible: guaranteed federal loans. The universities are guaranteed to get their money, so they charge what they like in tuition and use the money to fund a bloated administrative bureaucracy and go on construction spending sprees. The students are the ones who get screwed.

 
 
 
Texan1211
Professor Principal
1.1.3  Texan1211  replied to    6 years ago

Ah, but there is the rub.

Taxes will simply not go up for everyone.

 
 
 
epistte
Junior Guide
1.1.5  epistte  replied to    6 years ago
Someone has to pay for it. Might as well be the government.  Perhaps we should raise taxes on everyone.

A well educated popualtion more than pays for the investment by subsidizing post-secondary education. Higher paying jobs means people pay more income taxes and the economy is more stable than service industry or gig jobs. It's also lower unemployment when people can retrain easier and cheaper.  

You're somehow stuck on the idea that taxes are fines, you're being punished for others and that wealth is a right. 

 
 
 
96WS6
Junior Quiet
1.1.6  96WS6  replied to  epistte @1.1    6 years ago

As long as the government subsidizes loans Colleges have NO incentive to lower cost and that is why it has went up 260% since 1980 and will continue to skyrocket.  The only way to get tuition down is to get the government out of it but it is so far out of hand now that no one can afford an education without government "help"  which is exactly what they want.

It is ironic that if most liberal professors practiced what they preached they would teach for free and we wouldn't have  a problem.

 
 
 
epistte
Junior Guide
1.1.7  epistte  replied to  96WS6 @1.1.6    6 years ago

States are cutting funding for public universities and that pushes more costs on to the students. There isn't much that the government can do to control costs at private universities.

A decade since the Great Recession hit, state spending on public colleges and universities remains well below historic levels, despite recent increases. Overall state funding for public two- and four-year colleges in the 2017 school year (that is, the school year ending in 2017) was nearly $9 billion below its 2008 level, after adjusting for inflation. (See Figure 1.) The funding decline has contributed to higher tuition and reduced quality on campuses as colleges have had to balance budgets by reducing faculty, limiting course offerings, and in some cases closing campuses. At a time when the benefit of a college education has never been greater, state policymakers have made going to college less affordable and less accessible to the students most in need.

state spending on public colleges and universities remains well below historic levels, despite recent increases.

As states have slashed higher education funding, the price of attending public colleges has risen significantly faster than what families can afford. For the average student, increases in federal student aid and the availability of tax credits have not kept up, jeopardizing the ability of many to afford the college education that is key to their long-term financial success.

With many states facing revenue shortfalls in the current or upcoming fiscal year, state lawmakers must renew their commitment to high-quality, affordable public higher education by increasing the revenue these schools receive. [2] By doing so, they can help build a stronger middle class and develop the entrepreneurs and skilled workers needed for a strong state economy.

.

It is ironic that if most liberal professors practiced what they preached they would teach for free and we wouldn't have  a problem.

Since when do liberal profs support this idea?  Why should any professor teach for free?  Many of them are paying off student loans for Masters and PhDs.  How do they pay their bills and survive?

 
 
 
Perrie Halpern R.A.
Professor Principal
1.1.8  seeder  Perrie Halpern R.A.  replied to  96WS6 @1.1.6    6 years ago
It is ironic that if most liberal professors practiced what they preached they would teach for free and we wouldn't have  a problem.

See this is what bothers me when having a discussion like this. It's a talking point with no backup. So to set the record straight, it is not the professors that have been getting paid more, but administrative costs that have skyrocketed. 

Cap administrative costs

The best data on college costs comes from the Delta Cost Project, a nonprofit that analyzes data reported to the government. It shows that in the decade prior to 2011, the   biggest increase   in cost per student at large research universities — the ones that set the competitive norms and that are the focus of this essay — was not in instruction but in administration: student services, institutional support, research and academic support.

While faculty critics have made sport of pointing out the proliferation of assistant provosts or the soaring salaries of college presidents, these don’t represent most new spending. What does is the   growth in the number and pay   of non-teaching professionals in areas such as academic and psychological counseling, security, information technology, fundraising, accreditation and government compliance.

Administrators cite government regulations, along with increasingly demanding students and parents, as the causes; no doubt those pressures are real. But judging from the amount of time these professionals spend meeting with each other, I’d wager there is plenty of savings to be had by setting priorities and streamlining structure and decision-making. As management consultants from Bain & Co. wrote in a   recent report , “In no other industry would overhead costs be allowed to grow at this rate — executives would lose their jobs.”

Here’s a simple rule of thumb: A university should spend more on instruction than it spends on anything else, besides research.

 
 
 
Freefaller
Professor Quiet
1.2  Freefaller  replied to  Perrie Halpern R.A. @1    6 years ago

Absolutely agree the current process of removing the ability to work seems like the government is cutting off it's own face to spite it's nose

 
 
 
Spikegary
Junior Quiet
1.3  Spikegary  replied to  Perrie Halpern R.A. @1    6 years ago

One of the answers to this can be scholarships....I've seen estimates that over 50% of scholarships go unawarded.  Scholarships take work to put together the package and update it to the requirments of each scholarship, but it is essentially free money.  One of my neighbor's kids was going to college and costing a lot of money (out of state).  I asked him if he had applied to schlarships.  He said, No, he didn't know how.  I told him Google was his friend.  No effort, no reward and then staggering debt form college loans.

Additionally, college degrees are good for some careers, but there are lots if careers that don't require a degree and these jobs pay well and need to be filled.....the King is the guy that fixes your car, HVAC, unplugs your toilet, etc., etc.

 
 
 
sandy-2021492
Professor Expert
1.3.1  sandy-2021492  replied to  Spikegary @1.3    6 years ago

That's where high school guidance counselors could be of great value.  I got quite a few scholarships for undergrad, and he was a great help.  This was before Google, too.

 
 
 
sandy-2021492
Professor Expert
2  sandy-2021492    6 years ago

Garnish wages and tax refunds.  Taking away a borrower's ability to earn is entirely counterproductive.

 
 
 
Steve Ott
Professor Quiet
2.1  Steve Ott  replied to  sandy-2021492 @2    6 years ago
Garnish wages and tax refunds.

The Feds have already taken care of that. They won't send you your SS check.

 
 
 
Kavika
Professor Principal
4  Kavika     6 years ago

My great niece just graduated with a BS degree. She found employment and her total student debt is around $10,000 total. She is set up to pay this off in as short a time as possible. Much of loans were from her first year. When she figured out how deep in debt she would be if she keep it up she totally changed the way she was funding her schooling. 

It worked. 

I agree that taking someones ability to earn a living is counter productive. It' makes no sense.

 
 
 
Texan1211
Professor Principal
4.1  Texan1211  replied to  Kavika @4    6 years ago

Hmmm...some states take your license--even your regular old driver license-- if you don't pay child support. This sounds similar.

 
 
 
Kavika
Professor Principal
4.1.1  Kavika   replied to  Texan1211 @4.1    6 years ago
This sounds similar.

Damn sure does, and it doesn't make any sense either.

 
 
 
Texan1211
Professor Principal
4.1.2  Texan1211  replied to  Kavika @4.1.1    6 years ago

Sometimes harsh problems demand harsh solutions.

While each case is unique, I think we all know at least one deadbeat in our lives that might benefit from these harsh punishments.

And no, I am not anywhere close to assuming that all defaults are the result of deadbeats.

But the rate of default is astronomical on student loans, so clearly what we have been doing isn't working anymore.

 
 
 
Kavika
Professor Principal
4.1.3  Kavika   replied to  Texan1211 @4.1.2    6 years ago
But the rate of default is astronomical on student loans, so clearly what we have been doing isn't working anymore.

I agree. I found this link that addresses just that problem. For some reason I cannot link it to this comment. 

 
 
 
Texan1211
Professor Principal
4.1.4  Texan1211  replied to  Kavika @4.1.3    6 years ago

I read the data in the seeded article, but I have a question.

It states that there were 44 million Americans with student loans, but then when it talks about defaults, it specifies 8.5 million federal student loans.

Right there is an astronomical rate of default, but is the rate really even higher because maybe they ONLY included federal loan defaults?

 
 
 
Kavika
Professor Principal
4.1.5  Kavika   replied to  Texan1211 @4.1.4    6 years ago

I think that is the total student loans. I'm not sure but doesn't the fed's insure all student loans?

 
 
 
Texan1211
Professor Principal
4.1.6  Texan1211  replied to  Kavika @4.1.5    6 years ago

Not 100% sure but believe you can get a student loan from a bank.

Rates would be higher, though.

 
 
 
Kavika
Professor Principal
4.1.7  Kavika   replied to  Texan1211 @4.1.6    6 years ago

Yes you can get a private loan. There are a number of banks that offer them. 

I'm not familiar with student loans so a bit of research is due to find out some of the answers to the questions.

 
 
 
Perrie Halpern R.A.
Professor Principal
4.1.8  seeder  Perrie Halpern R.A.  replied to  Kavika @4.1.5    6 years ago
Right there is an astronomical rate of default, but is the rate really even higher because maybe they ONLY included federal loan defaults?

This is only fed student loans. When you get them from a bank, defaulting is like defaulting on a mortgage and does not get put into this category due to the much higher rates of interest. 

 
 
 
Paula Bartholomew
Professor Participates
6  Paula Bartholomew    6 years ago

The ones that irk me are those who got the student loans and became financially successful, yet still won't pay back the loans.  Those are the people who they need to go after first, the ones who can afford to pay the loans back but have made little to no effort to do so.

 
 
 
It Is ME
Masters Guide
6.1  It Is ME  replied to  Paula Bartholomew @6    6 years ago

"EQUAL" Justice under the law, no matter if one can afford it or not.

The definition of "EQUAL" isn't ……. "Divergence" based on circumstances !

 
 

Who is online


Snuffy
devangelical
Eat The Press Do Not Read It


68 visitors