Late On Your Student Loan? Your Healthcare License Can Be Suspended
Being buried in student loan debt is difficult enough without losing even more on top of it all. In Florida, however, missing your student loan deadline by too many days can cost you more than money and a damaged credit score. If you belong to certain professions, you might lose your your professional license as well, and in some states, even your driver’s license. Struggling with debt relief is difficult enough without losing your livelihood.
Florida Law Makes It Harder for Healthcare Workers to Pay Off Debts
According to the National Consumer Law Center, 22 states currently have laws on the books that allow the state to remove driver’s or professional licenses. In Florida, the relevant law affects “health professions or occupations.” The minimum disciplinary action imposed due to a failure to repay a student loan (or a failure to comply with service scholarship obligations) is the suspension of a license. The license is only suspended until the borrower agrees to new payment terms, and until a probation period has passed. To add insult to injury, a fine is assessed, equal to a full 10 percent of the defaulted loan amount.
Only two of those states are even considering taking down the law, and neither of them are Florida. Only Montana and Iowa have bills to repeal the laws that punish student loan debtors, and neither bill has yet become law. In Florida, if you are a member of a “health profession,” you may have to face this potential penalty. It is bad enough to threaten doctors and nurses, who may be struggling to pay down huge medical school bills, with suspension of their license, which can affect their reputations. The Florida law goes further, and applies to a large range of health-related professions, including 911 telecommunicators, social workers, athletic trainers, school psychologists, nursing home administrators, speech-language pathologists, paramedics, and more. If your profession is affected, you could be in danger of a suspended license.
Criticisms of the Laws
As commentators have pointed out, the penalty stymies the debtors’ ability to get to their jobs or practice them, making it “the most inappropriate consequence.” On the other hand, debt collectors have spoken out in defense of these laws. Rather than defend the practice, however, or dispute that it neutralizes a debtor’s ability to pay back the loan, debt collector commentators have stated that it is “more of a deterrent” than a reality or a serious issue. Instead, debt collectors claim they merely use it as a threat to encourage borrowers to change the terms of their payment plans. The debt collection agency interviewed on the topic claimed that the threat led to over $200,000 in fees that would have gone uncollected otherwise.
Unfortunately for borrowers, the numbers show that it is more than an empty threat. Even though most people have not heard of these laws, they do have an impact. In 2012 alone, the state of Iowa suspended over 900 licenses under the relevant statute. In Tennessee, meanwhile, 1,500 people have had their professional licenses suspended. Other commentators note that, even if it worked as a deterrent, it would still be insulting to borrowers, “making criminals” out of hard-working individuals struggling to pay down massive debts. One state representative from Montana has termed the laws “punitive and so demeaning.” If you are struggling with your student loan debt, don’t wait. Contact the Law Office of Julia Kefalinos, Attorney, P.A. in Florida today for a consultation on how to decrease your debt.