Press Release (ePRNews.com) - ROHNERT PARK, Calif. - Jun 18, 2018 - Beginning this week, Washington is no longer one of the 19 states that will revoke a professional license for non-payment of student loans. No longer will professionals, such as teachers and nurses, lose their license and livelihood when a loan goes into default. Ameritech Financial, a document preparation company that assists with federal repayment plan applications, reminds borrowers that avoiding the many harsh consequences of default may be as simple as applying for an income-driven repayment plan.
“Though we applaud this legislation in Washington,” said Tom Knickerbocker, executive vice president of Ameritech Financial, “it’s scary to think that there are still 18 states that can take away your professional license if you fall behind on your student loans. Making those payments becomes much more difficult without that income. But there are federal programs that can assist you in keeping up with your loans.”
This practice can be traced back to Lyndon Johnson’s 1965 Higher Education Act that sought to make college accessible, encouraging banks to lend to students by guaranteeing the loans. Those guarantees became the responsibility of the state that issued them. As an unintended consequence, some states aggressively searched for ways to limit their exposure and license revocation gained favor. South Dakota enacted this provision in 2015 and collected $3 million, proving that the method is as effective as it is cruel.
Though we applaud this legislation in Washington, it’s scary to think that there are still 18 states that can take away your professional license if you fall behind on your student loans.
In enacting HB 1169, “An act relating to student opportunity, assistance, and relief of student loans,” the state of Washington not only repeals multiple provisions allowing suspension of a professional license due to student loan default, but it also establishes a student loan hotline and website, decreases judgement interest rate and increases garnishment exemptions for private student loan debt. This is important because licensed workers earn more, occupy full-time jobs at a higher rate and spend less time unemployed than unlicensed workers.
Though they have yet to take action, the Texas legislature has also discussed amending this severe procedure. State lawmakers there, including some of the most conservative members of the Texas House, say changes should be made to a state statute that bars workers from renewing their professional licenses if they are in default on their student loans since its reputation as a business-friendly state is damaged if Texans are prevented from working.
In any state, under any penalties, the best practice for borrowers is to make every effort to continue paying off their student loans and, if they find themselves having difficulty, they may consider federal income-driven repayment plans (IDRs) which base payments on income and family size. IDRs have the potential to reduce payments and perhaps even end in forgiveness; any balance left at the end of the 20- to 25-year term in a particular IDR plan may be forgiven.
“IDRs have the potential to make student loan payments more affordable, which can do wonders for borrowers’ payment success rate,” said Knickerbocker. “At Ameritech Financial, we help borrowers understand IDRs and apply for them if borrowers decide it is their best option. Our goal is to help our clients avoid default and the consequences of defaulting, such as losing professional licenses.”
About Ameritech Financial
Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of consumers with financial analysis and student loan document preparation to apply for federal student loan repayment programs offered through the Department of Education.
Each Ameritech Financial telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).
Ameritech Financial prides itself on its exceptional customer service.
Ameritech Financial Newsroom
To learn more about Ameritech Financial, please contact:
5789 State Farm Drive #265
Rohnert Park, CA 94928