Defaulting on student loan debt can have profound consequences for borrowers—lawsuits, poor credit, and even garnishment of wages or benefits. But a lesser-known consequence is the potential loss of a professional license. It may seem counterproductive to take away the ability of a borrower to earn a living to force payment of a debt, but many states will suspend or refuse to renew a license after student loan default. This is of particular concern to doctors since debt for medical education is significant and usually unavoidable.

The Cost of Medical Education Is Skyrocketing.

According to the American Association of Medical Colleges (AAMC) the cost of four years of medical school ranged from $255,000 to $337,000 for the Class of 2020. Most students graduate with debt, and 84% of students left school with $100,000 or more in debt.

Some of us may remember hearing Federal Reserve Chair Ben Bernanke testify before Congress that his son's student loan debt exceeded $400,000 when he graduated from medical school. Even the children of financially comfortable parents graduate from medical school with extreme debt. This debt has led some borrowers to a state of default and has put medical licenses at risk.

State Approaches to Student Loan Default and Professional Licenses

States vary in their approach to professional licensure for those in student loan default. State laws fall into a few broad categories:

1. Vigorous Enforcement of License Suspension Law Some states have vigorous enforcement of laws that deny or suspend professional licenses based on student loan default. Notable state with this approach: Texas. If you live in a state with a legal scheme to deny professional licensure for default, and you have concerns, you should contact legal counsel as soon as possible.
2. Enforcement but only for certain types of loans. Some states will only pursue license suspension or revocation for debt guaranteed by the state. Notable state: Louisiana.
3. License suspension law rarely enforced. Some states have a law that allows for license suspension, but the law is enforced unevenly or is not enforced. Notable state: Hawaii.
4. Law specifically prohibits loss of license because of default. Other states have laws that prohibit the loss of a medical license for defaulting borrowers. These states may have a rapidly changing enforcement environment. Notable state: Illinois.

What to Do if You Receive Notice of Pending License Suspension

If you receive notice of a pending license suspension action, or you fear that you will, it is time to call an attorney with experience working with the licensure of Medical Professionals. Any action against your license, including for student loan default, will have an Investigation and Adjudication process. During this phase, your attorney can address factors that may have contributed to default and negotiate a remedy.

Attorney Joseph D. Lento can protect your license and mitigate the potential for damage to your reputation. Call the Lento Law Firm's Nationwide Professional License Defense Team today at 888-535-3686 or contact us online to learn more.