By Bob Hildreth
Thank you to Representative Higgins for bringing this event together and leading the fight to end this unjust law. And thanks to the other organizations here today who are working to help students get out from under the burden of debt.
At the Hildreth Institute, we fight for students’ rights, and we know that students who have defaulted on their loans need help, not punishment. In many cases, they had a medical or financial emergency that caused their default. Often, they had to drop out of school due to the high cost, so they’re left with thousands of dollars in debt but no degree to show for it.
Our priority should be helping those students repay their loans or have them forgiven. But in Massachusetts, a senseless law stands in the way of student loan borrowers trying to get out of default.
Massachusetts remains among a handful of states that maintain laws requiring all occupational boards to revoke licenses for defaulting on any type of federal or state education debt.
Last year, Alaska, Illinois, North Dakota, Virginia, and Washington all eliminated their default suspension laws for job licenses. This session, at least eight states are considering their own repeal legislation. It’s time for Massachusetts to join them.
This misguided law was enacted in the 1990s, when the total volume of student loans had shot up after the 1986 reauthorization of the Higher Education Act. The media and public attention was focused on mounting student loan defaults and for-profit trade school abuse. Feeling the pressure, Congress forced a series of changes aimed at reducing defaults, in which states were encouraged to take strong action against defaulters including enacting legislation to deny professional licenses or state jobs to defaulters.
However, we learned that suspending licenses is a counterproductive and unfair punishment that doubles down on borrowers who are trying to stay afloat. Unable to practice their professions, defaulters are actually less likely to get back on track and repay their loans. This can ruin lives and families.
This practice can especially harm borrowers who didn’t finish college and are working in lower-wage jobs — athletic trainers, barbers, electricians, real estate salespeople, and plumbers all require professional licenses.
Defaulting on student loans is already hard enough — your credit score plunges, your wages and tax refunds can be garnished, and you lose eligibility for additional federal student aid. Losing a professional license as well won’t help borrowers repay their loans — it will only make it harder for them to repay.
We must help student loan borrowers get out of default, and by giving them back their right to earn a living, we are making one step in the right direction.