Unpaid Student Loans Could Cost You Your Career
The depth of how student loan debt affects lives goes deeper than a number on a statement reminding the borrower that his or her monthly bill is due. Defaulting on student loans can do more than just affect your credit score – it can cripple your job choices.
According to the Brookings Institute, 30% of jobs now require a certification or license in addition to a college degree, but laws exist in 19 states that allow for state agencies to revoke licenses. Ranging from medical professionals to teachers, game wardens, police, and barbers, anyone who needs a professional license can lose it due to unpaid student loan debt. In South Dakota, they’ll even suspend your driver’s license.
While creditors find new and aggressive ways to punish borrowers who default, revoking professional credentials seems a bit drastic and counterintuitive, but yet, some states still do it as a means of punishment, or at the very least, a means to get a debtor on a payment plan.
The average teacher in Georgia makes between $37,000 – $50,000 a year, so saddling them with, in some cases, $1,300 a month student loan repayment equates to a massive portion of their paycheck. Right now, laws exist in ten states prohibiting new K-12 teachers from working until they get on a student loan repayment plan.
THE STUDENT LOAN CRISIS ISN’T GETTING BETTER
For employers, this model is catastrophic. There’s 1.4 trillion dollars in student loan debt floating around America. There’s an inevitability that some of these borrowers are working for hospitals, firehouses, or local police. Yet, these people cannot work – not because of lack of skills or training, but because a rigid system of repayment doesn’t work in their favor.
One of the biggest misconceptions regarding student loans is the severity of the issue. The average millennial carries around $45-52K a year in student loan debt, which is certainly not a lightweight monthly payment. Student loan debt is the most significant source of income debt, second only to owning a home.
Unfortunately, some of the borrowers in default may not even know they’re in default. It’s possible that with the stress and unpredictability of life their loan statement was lost in time and became an “I’ll get around to it someday” scenario.
REIMAGINING CRIME AND PUNISHMENT
While it’s evident that those in default should have consequences for not paying back what they owe, the question needs to be asked: is there a better way? We can’t strip people of their means of making a living. According to the American Nurses Association, within the next five years, there will be a nurse shortage of almost four million nurses. Houston, Texas needs over 2,000 new police officers. Firefighters are in short supply in Kentucky, New York, Indiana, and Texas. Punishing people ready to fill these roles impacts local economy, whereas a solution to work with borrowers to find a realistic endpoint would prove to be more fruitful. Collectively, we need to do better.