Tennessee Bill Punishes Student Loan Defaulters by Denying Them State Jobs
Tennessee has a message for residents who default on their student loans: you can’t work in our state.
Under legislation that passed in the state House on Thursday, primary and secondary teachers, lobbyists, and sports agents will be added to the list of professionals who are subject to losing their state-issued licenses if they default on their college loans. Most other professionals who have state-issued licenses are already subject to the regulation, which can result in a license being denied, suspended, or revoked
Several Democratic legislators voiced objections to HB740 in an hour-long debate before it passed overwhelmingly, 70–24, down party lines. The bill passed the state Senate last year, where it was known as SB551, and now goes to Gov. Bill Haslam for his signature.
Some legislators publically wondered about the logic of a bill that denies student loan defaulters the ability to work and pay off their student loans. House Majority Leader Craig Fitzhugh, a Democrat from Ripley, said the bill was especially perplexing for teachers and sent the wrong message to a group of professionals that is already facing ample problems. The bill means that you would “be able to take a teacher out of a classroom because he or she, because of tough times, has become delinquent on a student loan,” Fitzhugh said. (“Bill Would Penalize Teachers, Lobbyists for Defaulting on Student Loans,” Knoxville News Sentinel, Feb. 2, 2012).
Rep. Mike Kernell, a Democrat from Memphis, said the bill was not only unfair to lobbyists but also was likely unconstitutional. Kernell said that since lobbyists are paid to assert the constitutional right of clients to petition the government for a redress of grievances, taking away that right for an unrelated debt is wrong. Although lobbyists aren’t licensed by the state, they must be registered with the Bureau of Ethics and Campaign Finance. Lobbyists with one or more defaulted student loans would lose their registration rights under the bill.
Rep. Charles Sargent, a Republican from Franklin and sponsor of the bill, said that teachers, lobbyists, and sports agents were only being added to a law that already existed. Sargent characterized the move as appropriate because loan defaults reduce the amount of money available for education loans to new students through the Tennessee Student Assistance Corp. Sargent said that “about 7 or 8 percent” of TSAC loans are in default now and the entire program could be jeopardized if the number rose too much. “I’m just trying to preserve TSAC for the children of the future,” Sargent said.
Sargent also said that, under the terms of the bill, TSAC and other lenders could adjust payments or otherwise work with student loan defaulters to avoid revoking state-issued licenses in hardship cases.
