Defaulting on a federal student loan could lead to the government blocking the renewal of your professional license. This generally happens only after other efforts to recover the loan have been unsuccessful. While the goal is to encourage borrowers to address their debt, it can feel counterintuitive—how can someone repay their loan if they’re unable to work in their profession?
Professional Licenses
The following states can block the renewal of professional licenses for health care professionals for defaulted borrowers of federal student loans. Health care professionals include nurses, licensed practical nurses (LPN), registered nurses (RN), nurse practitioners, doctors, speech pathologists, occupational therapists, physical therapists and psychologists.
- Alaska
- California
- Florida
- Georgia
- Hawaii
- Illinois
- Iowa
- Kentucky
- Louisiana
- Massachusetts
- Minnesota
- Mississippi
- Montana
- New Jersey
- North Dakota
- Oklahoma
- Tennessee
- Texas
- Virginia
- Washington
The following states can block the renewal of teaching licenses for K-12 teachers who are in default on their federal student loans.
- Alaska
- Georgia
- Hawaii
- Iowa
- Louisiana
- Massachusetts
- Montana
- New Jersey
- North Dakota
- Oklahoma
- Tennessee
The following states can block the renewal of any professional license for borrowers who are in default on federal and/or state student loans.
- Alaska
- Georgia
- Hawaii
- Illinois
- Iowa
- Kentucky
- Louisiana
- Massachusetts
- Montana
- New Jersey
- North Dakota
- Oklahoma
- Tennessee
- Texas
Several of the state laws also name specific occupations, such as accountants, attorneys, barbers and cosmetologists, correctional officers, debt collectors, dentists, genetic counselors, insurance, locksmiths, marriage counselors, pharmacists, roofers, social workers and veterinarians.
Driver’s Licenses
Three states include driver’s licenses within the scope of licenses that may be suspended for a failure to repay federal student loans. Montana, Iowa and Oklahoma suspend driver’s licenses for borrowers who are in default on their federal education loans.
Some states suspend driver’s licenses for people who do not register with Selective Service, while others allow men to register when they obtain or renew their driver’s licenses.
