The bill would stop the suspension of occupational licenses of those in default of student loans
ATLANTA (Jan. 23, 2018) – The R Street Institute welcomes Rep. Scot Turner’s (R-Holly Springs) introduction of HB 42 in the Georgia General Assembly. The bill would prohibit professional licensing boards from suspending the licenses of individuals who have fallen behind on their student loans.
Georgia is one of only 15 states that are empowered to suspend the occupational licenses, and therefore the jobs, of professionals who have defaulted on their student loans. While originally enacted to hold borrowers accountable and discourage defaults, this counterproductive policy has failed to achieve that goal. “This power works against its goal of debt collection,” said R Street’s Director of State Government Affairs Marc Hyden. “It strips people’s means to repay their debts, and even worse, it risks forcing Georgians into poverty, which harms families and increases the likelihood that they will seek state assistance.”
To make matters worse, this is all done unnecessarily. The government already employs other tried-and-true debt collection methods that do not put citizens out of work. Beyond this, Georgia’s policy has failed to achieve its most basic goal – encouraging borrowers to re-pay their debts. Research suggests that this authority does not reliably deter defaults.
The current policy first became law in 1998 and was renewed in 2001. Rep. Turner’s bill would repeal this misguided power. HB 42 has garnered bipartisan support and is co-sponsored by Rep. Lee Hawkins (R-Gainesville), Rep. Sharon Cooper (R-Marietta), Rep. Karen Bennett (D-Stone Mountain), Rep. Chuck Martin (R-Alpharetta) and Rep. Karla Drenner (D-Avondale Estates).