Student debt is but one of many crippling problems facing society today. A news report by CNBC uncovered a startling fact: state agencies have the authority to revoke licenses of student loan borrowers who renege on their debt repayments. Additionally, driver’s licenses can be suspended in states like South Dakota if students default on their debt repayments. As borrowers rack up larger student debt levels, government departments struggle to make ends meet. To combat this problem, drastic steps are being taken to collect the money from student borrowers. One such measure is the revocation of professional licenses in state.
19 States Revoking or Suspending Driver’s Licenses or Professional Licenses
To date, licenses have been revoked from realtors, massage therapists, psychologists, barbers, nurses, lawyers, teachers and even firefighters. The New York Times conservatively estimates that some 8,700 licenses have been revoked by government agencies for failure to make good on student debt repayments. This startling reality has far-reaching implications. Often, financial blogs, economic analysts, and the credit industry will use scaremongering tactics to encourage people to seek debt alleviation or debt consolidation assistance to sell their products.
However, the shocking reality is that government creditors are now seizing a variety of state-issued licenses from people who are defaulting on their student loan debts. This means that it is near impossible to find work if your driver’s license is taken away, but this is precisely what is happening around the country.
US Student Loan Debt Exceeds $1.3 Trillion
People who default on their student loan debt repayments may either have their licenses revoked, or suspended, pending repayment. Beyond household mortgages, student loan debt is now the greatest source of household debt in the US. The statistics as at Q1 2017 indicate the following:
- 71.4% of US household debt is mortgages/home equity loans
- 10.6% of US household debt is student loans
- 9.2% of US household debt is automobile loans
- 6% of US household debt is credit cards
- 2.9% of US household debt is classified as other debt
Most people are blithely unaware of state licensing regulations vis-à-vis defaulting on student loan debt repayments. While this may be beneficial to taxpayers by removing the burden from people who are gainfully employed in the workplace, these rules place an additional burden on the resources of government agencies by removing people from the workforce and wasting government funds on people who will not be able to work of all the states revoking licenses.
Tennessee is the most active state in prosecuting debt defaults. Unfortunately, people who are unable to repay their student loans routinely run into all sorts of trouble with their credit scores, and now their ability to work. For the past 7 years, the federal government has not relied on banks to fund student loans – it does it on its own. Unfortunately, government losses have soared and student loan debt now exceeds $1.3 trillion.
What Is the Solution to Rising Student Loan Debt?
The rising costs of US education make it near impossible for people to pay for their college studies out-of-pocket. This necessitates borrowing from government and/or banks and financial institutions. Unfortunately, costs can quickly spiral out of control and with limited job prospects borrowers can find themselves in hot water.
College students are typically strapped for cash, and that’s why CreditLoan is the right place to source valuable information on credit card management, paying down debts, and offering in-depth reviews of credit loan providers. Government agencies may believe that cancellation or suspension of licenses may help, but what’s really needed is enhanced education on credit management.
By applying for the most affordable student loans, from the most appropriate providers, it is possible to limit the financial burden and enjoy greater subsidization of your college education costs. Various options are currently available such as direct consolidation loans, direct plus loans, direct unsubsidized loans, direct subsidized loans, Federal family education loans, state loans, private loans, and Federal Perkins loans.
It is imperative to assess the appropriateness of each loan option on its merits. By understanding what options are available, and how repayments can be made, borrowers can avoid the indignity and disruption that government agencies are causing.