Senate Bill Would Stop States From Punishing People at Work for Missed Student Loans

Some states can revoke your job license if you fall behind. Democratic Sen. Elizabeth Warren and Republican Sen. Marco Rubio introduced legislation that would outlaw that practice.
by | March 5, 2019 AT 3:44 PM
The U.S. Capitol
The U.S. Capitol (Shutterstock)

States would be banned from denying driver's licenses and job licenses to people for falling behind on their student loan payments under bipartisan legislation introduced last week in the U.S Senate.

Democratic Sen. Elizabeth Warren and Republican Sen. Marco Rubio are working together on the Protecting Job Opportunities for Borrowers (Protecting JOBs) Act, which they first introduced last June.

"We shouldn't punish people struggling to pay back their student loans by taking away their driver's or professional licenses, preventing them from going to work and making a living," Warren said in a statement.

In his own statement, Rubio said it’s “wrong to threaten a borrower's livelihood” with this type of “catch-22.” He said the bill “ensures that borrowers are able to continue working to pay off their loans, instead of being caught in a modern-day debtors prison.”

Nearly 30 percent of professions require a license, according to the Brookings Institution. The list includes higher-paid jobs like doctors and lawyers as well as lower-paid jobs like teachers and hair stylists.

The legislation, which didn’t receive a vote last year, would maintain the federal government’s current debt-collection practices. But Warren’s website says it would “prevent states from suspending, revoking or denying state professional licenses solely because borrowers are behind” on payments.

This practice is currently permitted in 14 states, according to the libertarian Institute for Justice. In Florida, the state Board of Health recently told more than 900 health-care workers that their licenses could be suspended over student loan defaults.

Americans owe a collective $1.5 trillion in student loan debt, more than they owe for auto loans ($1.1 trillion) and credit cards ($977 billion). Rubio has spoken publicly about how it took him 15 years to pay back $150,000 he borrowed for his own degrees. Last summer, he tweeted his regret about voting for a bill in the state legislature allowing Florida to suspend the licenses of workers who defaulted on student loans.

A politically diverse collection of groups is supporting the Warren-Rubio legislation, including the liberal Generation Progress and the conservative Heritage Action and R Street. The nation’s two largest teacher unions -- the National Education Association and the American Federation of Teachers -- endorsed the bill, as did a variety of consumer, civil rights and youth organizations.

There does not appear to be any organized opposition to the legislation.

Graham Vyse | Staff Writer