In Tennessee, student debt can mean the loss of a license

In Tennessee, people who default on their student loans are at risk of losing their licenses.

Student debt in the United States has reached crisis levels. As Forbes reports, 44 million borrowers across the U.S. collectively owe more than $1.5 trillion in student loans. That figure makes student debt the second biggest form of consumer debt in the country behind only mortgages. What many people don’t realize, however, is that unpaid student debt can lead to the loss of one’s driving or professional license. Tennessee is one of the most aggressive states in the country for revoking licenses for unpaid student loans.

Denied the ability to work

As the New York Times reports, there are 20 states that suspend or revoke driving and/or professional licenses due to unpaid education debts. The newspaper found 8,700 cases nationwide of borrowers losing their credentials to work due to unpaid student loans, although the true figure is likely much higher because many states don’t keep track of how many licenses are suspended or revoked due to defaulted student loans.

Tennessee stands out as being one of the most aggressive states in the country when it comes to revoking professional licenses in this manner. Between 2010 and 2017, 5,400 people in the state were reported to professional licensing agencies for unpaid student loans. It is unclear how many of those people eventually had their licenses revoked because that figure is not tracked.

Bipartisan effort to make revocations illegal

It is ironic that people who are clearly struggling to repay their student loans would be denied the right to work. Tennessee, in particular, is facing a nursing shortage, yet a number of nurses have lost their nursing licenses in the state because they have defaulted on their student loans. While supporters of that practice say that revoking licenses helps pressure people into repaying their loans, critics point out that it makes little sense to deny people the right to work and thus the ability to pay back their loans.

Indeed, the issue has reached Washington and resulted in a rare bipartisan effort to make the practice of revoking licenses because of unpaid federal student loans illegal. Democratic Senator Elizabeth Warren and Republican Senator Marco Rubio recently introduced a bill that would prevent states from denying, suspending, or revoking licenses for unpaid federal student loans. Sen. Rubio said revoking licenses for student loan borrowers “makes no sense” while Sen. Warren called the revocations “wrong and counterproductive.” If the bill becomes law, states would have two years to comply.

Help for those in debt

Debt can be a terrible burden and one that can lead to unexpected consequences, as the above article shows. One way to get out of debt faster may be through bankruptcy. While bankruptcy is not the answer in every situation, it can help many people get back on their financial feet and free themselves from the burden of unsustainable debt. A bankruptcy attorney can advise clients about whether bankruptcy is right for them or if there are other options they may be able to pursue.