R Sheet on Georgia Suspension of Occupational Licenses for Student Loan Defaults
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Background
Georgia is currently one of 15 states that can suspend the professional licenses of individuals who have defaulted on their student loans. Nationally, such licensing suspension laws were largely the result of a crackdown on delinquent borrowers throughout the ‘80s and ‘90s. The U.S. Department of Education recommended that states adopt these laws, and many did.
In 1998 and 2001, the Georgia General Assembly approved bills to do just this. The measures directed state licensing boards to suspend occupational licenses for certain borrowers in default of state and/or federal student loans, including federally guaranteed student loans. Once delinquent by at least 270 days, a borrower’s occupational license can be suspended if either the Georgia Higher Education Loan Program or the federal government requests it.
While these laws were well-intentioned e orts to encourage borrowers to recover their satisfactory repayment status and deter future defaults, the measures have proven counterproductive and are largely unnecessary given the existence of traditional loan recollection tools.
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