Don’t compound the problems of student loan debt

State should pass bill preventing licensing action against those in default

AT THE BEGINNING of 2022, Zero Debt Massachusetts set as legislative priority passage of a bill to block any state agency or board of registration from denying or revoking any license or professional or occupational certificate, registration, or authority based on an individual’s default on an educational loan. This legislative amendment, filed in the House of Representatives as H.4339, aims to provide protection to the close to 1 million Massachusetts student loan borrowers at risk of having their licenses denied, revoked, or refused for renewal.

Unquestionably, the current student loan debt crisis has been exacerbated by the COVID-19 pandemic. However, the system of higher education financing was already structured to benefit all-mighty lending institutions and squeeze the poor, the young, and the underprivileged.

One of those national political decisions benefiting lending institutions included decreasing the funding of public universities and offering student loans instead of the educational grants previously available to needy students. Not surprisingly, many predatory and for-profit financial institutions took the opportunity to invest in the unregulated higher education market.

But instead of focusing on the questionable practices of these companies, the US Department of Education put pressure on student borrowers. According to US News and World Report, “In the 1990s […] the federal government urged states to use their license revocation abilities to curb the growing tide of student loan defaults.”

Many states then enacted legislation to suspend the professional and driver’s licenses of borrowers who had defaulted on their student loans, enforcing these new laws with aggressive zeal. Between 2005 and 2015, Illinois alone suspended the licenses of 2,300 workers in 50 different occupations, affecting more than 600 cosmetologists, 400 pharmacists, barbers, and counselors. Shockingly, because of the shortage of nurses, Illinois also suspended the licenses of almost 500 nurses.

Other states followed suit. A New York Times investigation identified at least 8,700 cases in which licenses were revoked because of a student loan default. The investigation detailed the case of a nurse in Nashville, whose sudden epileptic seizures kept her from work and defaulted on her loans. She then lost her license and the ability to work. This case is not unusual.

In spite of the extreme punitive nature of these laws and the zeal with which they were enforced, they proved to be quite ineffective. For instance, the Illinois Department of Financial and Professional Regulations couldn’t determine how much student loan debt has been recovered.

This mean-spirited and extremely punitive measure, directed, as it is, at the most vulnerable sections of our population — the low-income, the young, and the perennially harassed communities of color, particularly Black women — prompted a writer for US News and World Report to poignantly ask, “If people are unable to work… how can they be expected to pay their debt?”

In recognition of the unfairness and extremely punitive nature of these laws, there has been pressure coming from many places demanding their abolition and appropriate response to the national student debt crisis. Unions of borrowers and borrowers’ advocates were the first to sound the alarm.

In Massachusetts, state Rep. Natalie Higgins of Leominster sponsored and provided leadership for the passage of the Professional License Protection Bill H.4339, which initially received strong support, but is currently languishing in the Senate Committee on Ways and Means.

It is clear that the student loan debt crisis has disproportionally affected some of the most vulnerable members of society. As long as there is legislation on the books that hangs like Damocles’s sword over the head of every student loan borrower, the state is perpetuating an economic and racial injustice.

The legislature must approve the Professional License Protection bill with all due haste.

Claudio Martinez is executive director of Zero Debt Massachusetts.