As hard as it may be to believe, you can actually lose your livelihood over failed payments of your student loans. Though it may sound improbable, failure to pay up your monthly student loan repayments can really lead to losing your job or an inability to work in your desired field in some states.
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How is this even Possible?
Several professions are supervised and overseen by the state’s local government, such as Doctors, Nurses, Cosmetologists, Lawyers, etc. To be able to work in these professions, you have to be licensed by your state in your area of work.
In a lot of states, the borrowers who have fallen behind on their monthly student loan repayments might find their license to practice being suspended which would lead to them being unable to continue working.
And as anyone reading this right now would be thinking, it really is counterintuitive to take away the jobs of those who are already running behind on their monthly student loan repayments, but that is exactly what is happening in not just one but 22 states.
It would instead be much better for everyone if the state could identify those who are falling behind or are likely to fall behind on their monthly payments and offer them a repayment plan that could help them get back on their feet and resume making reasonable monthly payments again. The most common victims who have lost their livelihood so far due to non-repayment are cosmetology professionals, followed closely by the registered nurses and the nurse aids.
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Questionable Timeline of Events
Most of the 22 states that have these laws implemented, put them in place during the late ’90s through the early 2000s. This was well before the federal government even became the direct lender for the government-issued student loans. These laws were essentially passed because many states at that time guaranteed the loans and this served as a sort of warning bell for the borrowers to continue making payments on time and help the local state governments get back their money on time.
The Federal Government overhauled the student loan system in 2010 and started guaranteeing the loans, which lead to a reduction in the state’s incentive to perform individual debt collection.
Despite such efforts by the federal government towards changing the federal lending programs to help borrowers, states such as Tennessee have actually gotten even more aggressive in suspending the licenses of professionals who are running behind on their debt. More than 4,000 suspensions have taken place in Tennesse since 2009 and later, prior to the 1999 law being enforced. The state has ramped up its enforcement efforts in recent years with the passing of legislation in 2012 which expanded the law to reach other professionals, including Teachers.
The real question that needs to be asked here is if the state government is placing such laws in place to MONITOR the loans they are lending out, then why have the enforcement and legislative efforts increased while the state’s role in the lending has actually decreased.
What does all this actually mean?
What this means is that if you are a working professional and are worried if your ability to work for a living and earn an income can be affected by your ability to make monthly payments on your student loan, then you can check out the list provided by the National Consumer Law Center to get the exact details on how such laws would apply in your state. These laws not only are a burden for the borrowers but also do not help out the state in case of delay in monthly repayments by loanees. One way to keep yourself from getting into such situations may be to refinance your student loans to get better repayment terms as well as interest rates. Interested and want to learn more? Check out the Best Companies To Refinance Your Student Loans.
The final advice that can be given to student loan borrowers is to keep a close eye on your finances and repayment situations and seek help from your lender if you think you may be falling behind on your payments.