Senate bill would bar Illinois from axing occupational licenses due to student loan debt
Under Illinois law, defaulting on student loan debt could jeopardize one’s occupational license. But a Senate bill would protect indebted workers from displacement.
For many, the reward of a fulfilling career is what makes the cost of higher education a worthwhile investment. But failure to repay that steep cost may run the risk of upending one’s occupation – particularly if practicing it requires a license.
In Illinois, state officials reserve the right to suspend or revoke one’s occupational license for defaulting on student loan payments. These obscure regulations carry the potential for enormous financial pain for the millions of Illinoisans who work in licensed professions.
One proposal in the General Assembly could protect licensed professionals against this risk, however. Senate Bill 2439, filed Jan. 30 by Sen. Scott M. Bennett, D-Champaign, would change the current law by removing Illinois’ gamut of statutory provisions that require or allow state licensing boards to consider the student loan performance of license holders and applicants with regard to issuing or renewing licenses.
SB 2439 has garnered bipartisan support. The bill’s roster of chief co-sponsors includes state Sens. Michael Connelly, R-Naperville; Thomas Cullerton, D-Villa Park; and Melinda Bush, D-Grayslake.
The proposal would eliminate language from the Civil Administrative Code of Illinois requiring the Illinois Department of Professional Regulation, or IDPR, to deny licenses or renewals to “any person who has defaulted on an educational loan” unless that person is performing satisfactorily under a repayment plan. The bill would also remove language allowing IDPR to suspend or revoke a license for failure to make satisfactory repayments on delinquent or defaulted loans.
SB 2439, which establishes the Career Preservation and Student Loan Repayment Act, would stop regulatory directives and referrals between the IDPR, the Illinois Student Assistance Commission and other licensing agencies and boards with respect to student loan delinquencies and defaults. Under this act, no government body could refer a licensee’s student debt performance to another, for the purpose of influencing the status of an occupational license.
The Land of Lincoln would be better off without these extreme penalties. And in fact, they are seldom invoked. Lawmakers would be wise to reconsider the faulty logic behind laws that presume hastened debt repayments, yet threaten the license imperative to one’s income.
Illinois is one of 19 states in which defaulting on student loans risks losing one’s ability to work, according to a New York Times report. More then 60 percent of Illinois’ four-year college graduates from the class of 2016 had college debt, with the average amount of that debt standing at more than $29,200, according to a 2017 study by the Institute for College Access and Success.
Occupational licensing requirements impose burdensome costs and impediments. Typically, the purported intent of such requirements is to uphold a standard of quality or safety for consumers. However, there remains no clear evidence that these laws improve the many services they regulate. Market forces such as consumer reviews and voluntary certification are often more effective ways of promoting quality services and workmanship. And licensing boards are often composed of incumbents to the very industries they’re tasked with regulating, inviting an incentive to limit competition – and therefore consumer choice.
By narrowing the field of potential competitors, licensing requirements risk diminishing, rather than preserving, the standard of quality delivered to consumers.
Illinois’ economy would stand to gain from a business environment in which barriers to entry remained low and the number of entrants remained high. Passing SB 2439 would be a small but necessary step toward ensuring more Illinoisans have the ability to prosper.