"Fall behind on your student loans? You could lose your license to work. Texas lawmakers want to change that." was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.
From the most conservative faction of the Texas House to a liberal stalwart in the Senate, lawmakers from both major political parties are trying to change a state statute that can hinder teachers, dentists, nurses and other professional license holders from working if they fall behind on their student loans.
A March report from The Texas Tribune found more than 4,200 Texans were at risk of losing their licenses to work in 2017 because they were in default on their loan payments. Occurring alongside a national push to overhaul occupational licensing regulations, the practice caught the attention of state legislators, and the hardline conservative House Freedom Caucus quickly committed to reforming the Texas laws.
It “seems very counterintuitive to take away someone's occupational license for failure to pay student loans," said state Rep. Matt Krause, R-Fort Worth, a member of the caucus and author of one of the bills. “If the person can no longer work, then how are they supposed to pay back the loans? There are other ways to keep individuals accountable for their debts."
The Texas provision, which dates to the 1980s, affects occupational license holders like cosmetologists, dentists and teachers — some 250 of whom had applications to renew their teaching licenses denied because of student loan debt between 2013 and 2018, according to data from the Texas Education Agency.
Among those teachers was Roderick Scott Sr., a Dallas-based instructor. Scott told the Tribune last year that he had been shocked to find there was a hold on his teacher’s license in 2015. Although he immediately contacted his loan collector to try to rectify the problem, it was just the beginning of what became a financial nightmare.
To retain his job at a middle school, Scott put his loan payments before rent and other bills. His bank account was garnished, he was evicted and he ultimately had to file for bankruptcy.
“It's sad. He didn't tell his students [of his financial difficulties]; he didn't tell his kids — and he's got to prioritize, do I pay my mortgage?” said state Rep. Cesar Blanco, D-El Paso. “When somebody loses their license to work, it doesn't make them pay their loans, it only puts them in further financial distress.”
“While I understand the law's intent previously — that it may bring attention to default — borrowers are in a worse position to pay back their loans without any income,” he said.
Blanco is one of three Democrats and three Republicans who have filed bills since November to address the issue. Krause; state Rep. Ana Hernandez, D-Houston; and state Sen. Judith Zaffirini, D-Laredo, have put forth identical measures that would “end this nonsensical policy in Texas,” Zaffirini said.
State Rep. Tom Oliverson, R-Cypress, and state Sen. Dawn Buckingham, R-Lakeway, have authored similar measures.
The bipartisan interest, along with the number of bills filed, has left lawmakers hopeful substantive change can happen this session. Zaffirini said the "coalition of legislators" and the little opposition registered is a "strong signal that the Legislature will come together to address this issue" in 2019.
"While getting a bill to Gov. [Greg] Abbott’s desk is always a challenge," Buckingham said, her measure is a "commonsense, bipartisan piece of legislation that I expect will have support in both chambers." Abbott, a Republican, already has announced his support for one of the bills.
If passed, the legislation would remove the portion of state law that makes student loan default grounds to revoke, suspend or not renew a professional license. Those in default on their student loans would still risk having their wages garnished, their tax refunds withheld or lawsuits filed against them.
A division in Attorney General Ken Paxton’s office collects on loans issued by the state. A private nonprofit called Trellis Company, which was once a public entity, performs a similar function for old loans made by the federal government.
Donna Fritz, a spokeswoman for Trellis, said the corporation isn't taking a position on the bills. She said in a statement that the organization’s “primary interest is in helping the federal student loan borrowers who come to us get out of default with programs that can cost as little as $5 per month. Once they’re out of default, we help them take advantage of the many repayment options available, especially those based on income.”
The attorney general’s office did not respond to a request for comment.
Originally thought of as an incentive to keep borrowers current on their payments, the practice of suspending or stripping professional licenses as a penalty has fallen out of favor across the country. Bills overturning the provision have been introduced in Alaska, Illinois, Washington and other states, after a New York Times investigation found 19 states had laws in place allowing the practice.
On the federal level, legislation sponsored by Sens. Marco Rubio, R-Florida, and Elizabeth Warren, D-Massachusetts, would bar states from revoking or refusing to issue professional licenses due to the status of an applicant’s federal student loan debt.
“These are commonsense steps to get rid of something that is counterproductive to paying off debt,” said Rob D’Amico, a spokesperson for the Texas affiliate of the American Federation of Teachers.
Scott, the Dallas-based teacher, said Wednesday that he was "overjoyed" to hear about the proposed bills.
"I wish it could have occurred sooner, so I could have not gone through it," he said while tidying and preparing for the next school day. "But I don't mind having to go through something if it's going to benefit others. That makes it worth it to me."
Disclosure: Trellis Company has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.