In 2015, Mr. Zolnikov co-sponsored a bill with Representative Moffie Funk, a Democrat, that stopped Montana from revoking licenses for people with unpaid student debt — a rare instance of bipartisanship.
The government’s interest in compelling student borrowers to pay back their debts has its roots in a policy adopted more than 50 years ago.
In 1965, President Lyndon B. Johnson signed the Higher Education Act, which created financial aid programs for college-bound students. To entice banks to make student loans, the government offered them insurance: If a borrower defaulted, it would step in and pick up the tab. The federal government relied on a network of state agencies to administer the program and pursue delinquent borrowers. (Since 2010, the federal government has directly funded all student loans, instead of relying on banks.)
By the late 1980s, the government’s losses climbed past $1 billion a year, and state agencies started experimenting with aggressive collection tactics. Some states garnished wages. Others put liens on borrowers’ cars and houses. Texas and Illinois stopped renewing professional licenses of those with unresolved debts.
The federal Department of Education urged other states to act similarly. “Deny professional licenses to defaulters until they take steps to repayment,” the department urged in 1990.
Two years ago, South Dakota ordered officials to withhold various licenses from people who owe the state money. Nearly 1,000 residents are barred from holding driver’s licenses because of debts owed to state universities, and 1,500 people are prohibited from getting hunting, fishing and camping permits.
“It’s been quite successful,” said Nathan Sanderson, the director of policy and operations for Gov. Dennis Daugaard. The state’s debt collection center — which pursues various debts, including overdue taxes and fines — has brought in $3.3 million since it opened last year. Much of that has flowed back to strapped towns and counties.
But Jeff Barth, a commissioner in South Dakota’s Minnehaha County, said that the laws were shortsighted and that it was “better to have people gainfully employed.”
In a state with little public transit, people who lose their driver’s licenses often can’t get to work.
“I don’t like people skipping out on their debts,” Mr. Barth said, “but the state is taking a pound of flesh.”
Mr. Sanderson countered that people did not have to pay off their debt to regain their licenses — entering into a payment plan was enough.
But those payment plans can be beyond some borrowers’ means.
Tabitha McArdle earned $48,000 when she started out as a teacher in Houston. A single mother, she couldn’t keep up with her monthly $800 student loan payments. In March, the Texas Education Agency put her on a list of 390 teachers whose certifications cannot be renewed until they make steady payments. She now has no license.
Randi Weingarten, president of the American Federation of Teachers, who has worked to overturn these laws, called them “tantamount to modern-day debtors’ prison.”
States differ in their rules and enforcement mechanisms. Some, like Tennessee, carefully track how many borrowers are affected, but others do not keep even informal tallies.
In Kentucky, the Higher Education Assistance Authority is responsible for notifying licensing boards when borrowers default. The agency has no master list of how many people it has reported, according to Melissa F. Justice, a lawyer for the agency.
But when the agency sends out default notifications, licensing boards take action. A public records request to the state’s nursing board revealed that the licenses of at least 308 nurses in Kentucky had been revoked or flagged for review.
In some states, the laws are unused. Hawaii has a broad statute, enacted in 2002, that allows it to suspend vocational licenses if the borrower defaults on a student loan. But the state’s licensing board has never done so, said William Nhieu, a spokesman for Hawaii’s Department of Commerce and Consumer Affairs, because no state or federal student loan agencies have given it the names of delinquent borrowers.
Officials from Alaska, Iowa, Massachusetts and Washington also said their laws were not being used. Oklahoma and New Jersey eliminated or defanged their laws last year, with bipartisan support.
But in places where the laws remain active, they haunt people struggling to pay back loans.
Debra Curry, a nurse in Georgia, fell behind on her student loan payments when she took a decade off from work to raise her six children. In 2015, after two years back on the job, she received a letter saying that her nursing license would be suspended unless she contacted the state to set up a payment plan.
Ms. Curry, 58, responded to the notice immediately, but state officials terminated her license anyway — a mistake, she was told. It took a week to get it reinstated.
“It was traumatic,” Ms. Curry said. She now pays about $1,500 each month to her creditors, nearly half her paycheck. She said she worried that her debt would again threaten her ability to work.
“I really do want to pay the loans back,” she said. “How do you think I’m going to be able to pay it back if I don’t have a job?”
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