More From Credit.com: What Happens If I Ignore My Student Loans
Repeal advocates argue that license suspension is a counterintuitive punishment for student loan defaulters, because it may keep them from working, which theoretically enables them to repay their debts. That’s the case Montana state Rep. Moffie Funk is making for the bill she introduced to repeal the state’s law that allows driver’s license suspension, Bloomberg reports.
According to a list from the National Consumer Law Center, 22 states have laws that enable suspension of state licenses issued to student loan defaulters. The professions and licenses affected by suspensions vary by state and cover a wide range of earning potential, but some of them include doctors, social workers, barbers, transportation professionals and lawyers — the lists can be quite extensive. If your state is on the list and you’re at risk of defaulting, you might want to research the details:
Student loan default trashes your credit, and the loans continue to incur interest and fees as long as they remain unpaid, so getting out of default can be very challenging. If you have federal student loans, as most people who borrow do, there are many options available to you before you’re 270 days past due on your student loan payments (that’s the definition of default): You can apply for income-based repayment or pay-as-you-earn programs, in addition to applying for an extended repayment period, which will raise the cost of your loans in the long run but make them more affordable now.
More From Credit.com: Repayment Options for Student Loans
If you want to see how your student loans are affecting your credit, you can get your free credit scores, updated monthly, on Credit.com. You can check your credit reports for free once a year from each of the three major credit reporting agencies at AnnualCreditReport.com. Because student loans are generally not dischargeable in bankruptcy and default can be catastrophic for your credit, it’s crucial to prioritize making your loan payments on time.
Any opinions expressed in this column are solely those of the author.