Even by government standards, it is a colossally dumb idea: revoking someone's license to work as a way to get them to pay off their student loans. Yet many states do just that.
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.
More student debtors are falling behind on their federal student loans, after three years of declines in late payments—and with no clear explanation, experts aren’t sure whether to take it as a sign of distress or a temporary blip.
The new chairman of the Federal Reserve questioned why struggling borrowers can’t discharge their student loans in bankruptcy.
“Alone among all kinds of debt, we don’t allow student loan debt to be discharged in bankruptcy,” Jerome Powell told members of the Senate Banking Committee Thursday. “I’d be at a loss to explain why that should be the case.”
Forty-four million Americans hold a total of $1.3 trillion in student loan debt. According to the Federal Reserve, the average amount of debt held by student loan borrowers is $32,731, and the average monthly amount due is $393.
Of these borrowers, 19 percent are behind on their payments.
If you miss a payment on your federal student loans, you have 270 days to make a payment before your debt goes into default. More than 3,000 people default on their federal student loans every day.
When President Trump rolled out his recent budget proposal, it made some cuts that were always going to cause controversy. For one thing, his plan would slash subsidized student loan repayment plans, and let the government crack down on missed payments. To left-wing politicians who think the state should hand out more subsidies, this might as well have been Armageddon.
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"There is scarcely anything that drags a person down like debt."
– P. T. Barnum
“This would be a much better world if more married couples were as deeply in love as they are in debt.”
– Earl Wilson
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– Marie Curie
"Bankruptcy laws allow companies to smoothly reorganize, but not college graduates burdened by student loans."
– Robert Reich
“What I would like to do... once I take care of all my kids' student loans, is buy a red 1965 Mustang and fully restore it.”
– Mike Quigley
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