Americans owe about $1.8 trillion in student loan debt, and many of them have a difficult time paying it back.
If you default on a loan in Massachusetts, however, you may lose the opportunity to work in your desired field because of certain state requirements. However, a bipartisan group of state legislators wants to change that.
The final paragraph of Section 13 Chapter 30A of Massachusetts General Laws directs the Commonwealth to deny “issuance of a professional or occupational certificate, registration, license” to educational loan defaulters. Massachusetts is one of 13 states in the country that does that; the other 37 do not.
Three bill would remove the loan-default impediment to state licenses in Massachusetts: SD.510 An Act Relative To Unpaid Student Loans, sponsored by state Senator Ryan Fattman (R-Webster); HD.930, An Act Prohibiting License Revocation for Student Loan Default, sponsored by state Repersentative Natalie Higgins (D-Leominster); and HD.513, An Act To Limit the State’s Authority To Prevent the Renewal of Licenses After Default on Student Loans, sponsored by state Representative David Muradian (R-Grafton).
Fattman’s bill is the shortest of the bunch. It simply directs the Commonwealth to eliminate the final paragraph of Section 13 Chapter 30A of Massachusetts General Laws. There would be no replacement for it.
In a statement emailed to NewBostonPost, Senator Fattman said that existing law defies common sense when working-class people are trying to pay back their loans. Fattman said:
Under the current law, the state is allowed to suspend a professional license if one were to default on their student loans. This procedure is counterproductive, as it strips the individual of their ability to produce an income, making it even more difficult to pay off those loans.
Forced closures due to COVID-19 have highlighted the economic hardships faced by many professionally licensed individuals such as hairdressers, massage therapists, and physical therapists. These professions require close contact and have seen many restrictions since the start of the pandemic. While the Department of Education has extended grace to borrowers through forbearance temporarily, the protection is not permanent.
When forbearance is not in place, these individuals do not need the threat of losing their professional license and their income source because of significant economical challenges they face while trying to pay back their loans.
Higgins’s bill also strikes out the loan-default paragraph, but replaces it with the following: “No agency, and no board of registration operating under the provisions of chapter 112, 5 shall deny issuance of, revoke, or refuse to renew any license or professional or occupational 6certificate, registration or authority based on an individual’s default on an educational loan.”
Higgins could not be reached for comment earlier this week.
Muradian’s proposal wouldn’t eliminate the revocation of occupational licensure, but it would limit the state’s authority to do so. He wants to amend current state law to say: “Only an applicant who has defaulted on their educational loans three months within a 12 month period is subject to revocation, suspension or refusal to renew a professional or occupational certificate, registration or license. Said revocation, suspension or refusal to renew, shall not occur unless applicant has received written notice 30 days after first defaulted student loan payment.”
Current law makes no mention of the number of months a debtor must default on educational loans before losing an occupational license from the state.
Muradian could not be reached for comment earlier this week.
Shoshana Weissmann of R Street Institute, a free-market-oriented public policy research organization headquartered in Washington D.C., said the proposed reform is long overdue.
“Striking these provisions entirely would be the best option,” Weissmann told NewBostonPost by email. “Laws like these were enacted after the federal government pushed it as a good way to encourage student loan repayment in the 1990s. However, evidence shows that even where loans are repaid, they’re paid by taking out more loans. This isn’t working and it hits the most vulnerable when they’re down. It’s also frequently used against teachers and nurses which is additionally cruel during a pandemic.
“The bottom line is, if you want loans paid, you don’t take away people’s occupational license to work in the profession where they will presumably make the most money,” she added. “Stories of people harmed by the current laws are heartbreaking. I appreciate Sen. Fattman, Rep. Higgins, and Rep. Muradian working on this, and that the effort is bipartisan! R Street has also praised Rep. Higgins’ tireless effort on this issue in the past.”
Paul Craney, spokesman for the Massachusetts Fiscal Alliance, a right-of-center watchdog on state government, agreed.
“Anything the government can do to make it easier for self-employed workers to be able to work should be encouraged,” Craney told NewBostonPost in an email message. “One less layer of red tape at the occupational licensing division is a step in the right direction.”
This idea has bipartisan support at the federal level, as well. On February 3, U.S. Senator Marco Rubio (R-Florida) and U.S. Senator Elizabeth Warren (D-Cambridge) reintroduced the Protecting Job Opportunities for Borrowers (PROTECTING JOBs) Act. If enacted, the bill would prevent states from “suspending, revoking or denying state professional, teaching, or driver’s licenses solely because a borrower falls behind on their federal student loan payments,” according to a press release put out by Rubio’s office.
“Taking away people’s drivers’ or professional licenses simply because they’re struggling to pay back their student loans is unconscionable,” Warren said in the press release. “Even before this pandemic, student loan debt was crushing millions of Americans — and this is why I’m fighting to get immediate relief to students by cancelling up to $50,000 in federal student loan debt and why I’m glad to be reintroducing this bipartisan legislation with Senator Rubio to remove senseless roadblocks so that borrowers can build better financial futures.”
A spokesman for the Massachusetts Division of Professional Licensure could not be reached for comment earlier this week.
