Licenses of thousands suspended for student loan default (most reinstated)

More than 4,200 Tennessee professionals have have had their licenses suspended for defaulting on student loans since 2009 according to figures from the Tennessee Student Assistance Corp. reported by the Times-Free Press. Of the 4,200 who have lost their licenses, 3,185 have been reinstated after getting on a payment plan.

“It’s a last-ditch effort on our part to catch their attention,” said Peter Abernathy, TSAC staff attorney. “Many have gone years without making a payment. This, it has been a helpful thing to help get them back into compliance and good standing with their credit.”

…Still, others question whether the policy is counterproductive, especially in a time when student loan default rates are at historic highs.

“If you can’t pay your student loans and all of the sudden you can’t work, you’re in a Catch-22,” said Sharon Adkins, executive director of the Tennessee Nurses Association. Behind cosmetologists, RNs and nurse aides had the highest rates of suspensions.

Such questioning has driven lawmakers in some other states to revisit such laws. This year, Montana legislators repealed a bill that allowed revocation of professional and driver’s licenses. The bill’s sponsor called it “unnecessarily punitive.”

…Tennessee’s 1999 statute applied to all professions under the Tennessee Department of Health and most boards under the Department of Commerce and Insurance — but the state only began enforcing it a decade later.

In 2012, lawmakers passed another bill that added all other licensed professions to the list, including teachers and lobbyists.

…Contrary to the national rates, Tennessee’s student loan default rate has been going down over the last several years following an increase during the recession. It is now around 9 percent, compared to the national rate of 13 percent.