If You Live Here You Could Lose Your Driver’s License For Defaulting On Your Student Loan
Word to the wise, don’t get behind in your student loan payments if you live in certain states. In 22 of them you can lose your driver’s license or your professional certification if you fail to repay your student loan.
The National Consumer Law Center recently released a list of states whose laws allow the suspension of state licenses issued to student loan defaulters. “Some states suspend licenses needed to practice in certain fields, from health care to cosmetology, though license suspension can extend to driving, too,” reports Time.
This could affect a lot of people. According to Department of Education data, the number of direct loan recipients in default jumped from 2.1 million in 2012 to 2.5 million in 2013.
The states are: Alabama, Alaska, California, Florida, Georgia, Hawaii, Illinois, Iowa, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Montana, New Jersey, New Mexico, North Dakota, Oklahoma, Tennessee, Texas, Virginia, and Washington.
Iowa and Montana however are considering bills that would repeal laws that allow states to suspend the driver’s licenses if you default on your student loan. Repeal advocates are pushing for these changes as they argue that license suspension is actually a counterintuitive punishment for student loan defaulters since it could prevent them from working making it impossible for them to make loan payments.
But if you are having trouble repaying your loan, you should be active and take a few steps to rectify the situation. First, call your lender and try to arrange a new payment plan. “If you have Federal student loans, you have a lot of repayment plan options. When you first see your statement in the mail, your lender defaults you into the standard repayment plan – which is 10 years of even payments,” reports Forbes.
If you have more than one student loan, you might want to consider consolidating your loans so you have one payment to make.
Lastly, see if you are eligible for a deference or a forbearance, which will delay paying for a period of time. Normally, if you are unemployed or have returned to school you are a candidate for this option.