Most of the nation is unaware of it, but there are two states which will take your driver’s license away if you do not pay your student loans.
This has obvious consequences for potential employment, as well as childcare, creating a downward spiral of self-perpetuating poverty.
The Montana Department of Justice says that those who default on their student loans face “indefinite suspension until student loan association notifies Motor Vehicle Division of compliance.”
The Department of Motor Vehicles in Iowa parallels this legislation almost identically. The law says that the State will “suspend a person’s driver’s license upon receiving a certificate of noncompliance from the College Student Aid Commission in regard to the person’s default on an obligation owed to or collected by the commission.”
But the group Jobs With Justice notes that in October 2010, there were also 42 nurses in Tennessee who similarly had their licenses suspended for nothing other than falling behind on their student loans.
The irony of all of this is that taking away the ability to drive makes student loan defaulters even more certain to fall behind on payments.
In effect, this is little different than debtors prison, which, in a misguided effort to deter loan default, actually perpetuates it.
(Article by Reagan Ali; h/t to Chris Hicks and Jobs With Justice)