The promise of a career can often ease the burden of student debt many young graduates feel. However, student debt can actually keep students from working in their chosen career.

Currently, licensing agencies can revoke professional licenses from students who default on student loan debt.

To protect recent graduates, State Sen. Scott Bennett, D-Champaign, introduced Senate Bill 454 to prevent professional licensing boards from revoking an occupational or professional license because of student loan default.

A loan is considered defaulted when a borrower fails to meet the terms of the loan and pay the loan on schedule. Bennett said student debt is the number one consumer debt in the United States.

“We recognize that people want to pay off their student debt,” Bennett said. “These are obviously motivated people that have gone to school and have gotten licenses so they can work.”

A loan default can result in a series of consequences, including a negative credit rating or withholding a student’s tax refund or part of earned wages. If a person is still behind on the payments, a company’s licensing board has the authority to revoke a professional license.

Mitch Dickey, student body president, said licensing boards revoke professional licenses when borrowers default on student loans as a way to push people to repay the loan.

“The problem with this, though, is that the professional certificate is a means of being able to pay off your loan, so if you lose your professional certificate because of the default because you weren’t able to make enough money, well guess what? Now you definitely aren’t going to make enough money if your certificate is taken away from you,” Dickey said. “It doesn’t make any sense.”

He said he thinks Bennett’s initiative is beneficial and makes more sense than current regulations.

Terry Horstman, spokesperson for the Illinois Department of Financial and Professional Regulation, said in an email that the department provides occupational licenses to workers in a wide range of professions, such as barbers, bankers, veterinarians and architects.

Even though applicants’ loan defaults would not prevent them from receiving a license, Horstman said, the license could be revoked if the applicants do not repay their loans. However, before the license is revoked, the licensee is given the opportunity to attend a hearing and keep their license.

He said this rule is a part of the Civil Administration Code of Illinois, which states “the Department may issue a license or renewal if the aforementioned persons have established a satisfactory repayment record as determined by the Illinois Student Assistance Commission or other appropriate governmental agency of this State.”

Bennett’s bill is designed to help people pay off their debt by being able to keep their job. However, he said it does not mean people will be free of debt. Students will still be required to pay their loans.

“All this does is say we recognize these have to be repaid,” Bennett said. “But you at least have to continue to be working if you’re going to be realistic about your chances of paying off the loan.”

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