Lawmakers: Change state law that bars Texans in default on student loans from renewing work licenses

State lawmakers, 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.

“Next session the Legislature needs to address this issue head on and ensure that Texans who can’t pay student loans aren’t further crippled by government actions,” the conservative House Freedom Caucus, chaired by state Rep. Matt Schaefer, R-Tyler, said in a statement Tuesday. “Students should be responsible for repaying their debts, but taking away one’s ability to earn money in a licensed profession only exacerbates the problem.”

State Rep. Briscoe Cain, R-Baytown, a member of the caucus, called the provision "harmful to our economy and the lives of Texans." 

"If Texas is going to live up to its reputation as a business-friendly state, we must remove barriers like this and others that prevent Texans from working," he said.

The effort is showing early signs of support on both sides of the aisle. State Rep. Joe Moody, a Democrat from El Paso, said he could "certainly envision a bipartisan effort to address an issue like this."

"Where we have found a lot of room to work together in a bipartisan fashion has been in areas where we've got a little bit too heavy-handed in [doling out] consequences," Moody said. "The consequences of not paying in this situation can hinder you from continuing your career."

The reaction follows a report published in The Texas Tribune that found thousands of nurses, teachers and other professional license-holders in the state are at risk of losing their license each year because they’re in default on their student loans.

Texas is one of 19 states that have similar provisions on the books, but there is no comprehensive source of data on how frequently license renewals are held up for this reason in Texas or nationwide.

The Tribune’s report used records from multiple state agencies and organizations to find more than 4,200 people in the state – security guards, cosmetologists and pharmacists among them – were at risk of losing their license because of student loan default in 2017. Nearly 250 teachers had an application for a license renewal denied for this reason over the course of five years, according to data from the Texas Education Agency.

One of those teachers, Roderick Scott Sr., said he lost a “dream job,” was evicted, had his bank account garnished and eventually filed for bankruptcy after he fell behind on his student loan payments and had an application to renew his teachers license held up.  

In Texas, student loan default became grounds for license non-renewal in 1989. At the time, the state was experiencing historically high rates of student loan default, much of it coming from a burgeoning sector of lightly regulated for-profit schools. Suspending professional licenses, state staff said then, could create “a powerful incentive for a person to stay current on his payments.”

But critics say the provision is counterproductive, since it can impede people's ability to work and make it even harder for them to pay back their debt.

"It makes no sense to take away someone's only ability to pay off their loans,” Cain said Tuesday. "If Texas is going to live up to its reputation as a business-friendly state, we must remove barriers like this and others that prevent Texans from working."

In a statement posted to Twitter after the report's publication, state Rep. Matt Krause, R-Fort Worth, another Freedom Caucus member, also suggested the provision was illogical and said it should be addressed during the next legislative session. 

This needs to be addressed next session - a person can lose their license to practice a certain profession if he or she is in default of student loans. This doesn’t make sense. If you truly want... https://t.co/piJtRFFOJE

— Matt Krause (@RepMattKrause) March 27, 2018