Testimony from:

Marc Hyden, Director of State Government
Affairs, R Street Institute

In SUPPORT of SB 92, “AN ACT To amend
various titles of the Official Code of Georgia Annotated so as to prohibit
professional licensing boards from refusing to issue a license or suspending or
revoking the license of a person who is a borrower in default under an
educational loan issued through the Georgia Higher Education Assistance
Corporation or through a federal agency; to provide for related matters; to
repeal conflicting laws; and for other purposes.”

February 14, 2019

Chairman and members of the committee:

My name is Marc Hyden. I am a Georgia resident and the Director of
State Government Affairs for the R Street Institute, a nonprofit, nonpartisan
public policy research organization. Our mission is to engage in policy
research and outreach to promote free markets and limited, effective government
in many areas, including occupational licensing reform, which is why HB 92 is of special interest to

To date, Georgia is one of only 15 states that is empowered to suspend
occupational licenses of those who fall behind on their student loans. But
states have been increasingly abandoning this model, and for good reason. When occupational
license suspensions are initiated, licensees are prohibited from working in
their profession, which merely makes it harder to repay their debts. After all,
it is difficult for individuals to re-enter satisfactory repayment status if they
do not have a job. This policy essentially creates joblessness and subsequently
pushes the newly unemployed into poverty, making it more likely that they will apply
for taxpayer-funded assistance. Therefore, this government-created poverty
harms more than just those in default. It can increase the tax burden on
working Georgians.  

While originally designed to hold borrowers accountable and prevent
defaults, this policy has failed. As of 2015, the average federal student loan
default rate was higher in Georgia than it was in states without revocation
authority. Thus, the threat of suspension does not appear to be effective at
discouraging defaults. While it is certainly important to encourage debt
repayment, this must be done responsibly. Fortunately, we already have
time-tested tools at our disposal. Currently, the federal government can
garnish wages, seize tax returns and social security payments or assess liens
against the property of delinquent borrowers.

The bottom line is that Georgia should not be in the business of
creating poverty or needlessly increasing the burden on taxpayers by forcing
defaulters into unemployment. Instead, we should use the smarter mechanisms
already in place, and that is why it is critical that the Legislature pass SB 92.

Thank you for your time,

Marc Hyden

Director of State Government Affairs

The R Street Institute

[email protected]

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