Florida Board of Health Suspends Healthcare Licenses Over Student Loan Defaults

Dy-no-mite Nurse1, CNA, LPN · Feb 1, 2019

Wow! that is crazy and makes no sense at all. how do they expect the debt to get paid now they've taken their only way to make a decent living? I hope this changes.

Not_A_Hat_Person, RN · Feb 18, 2019

On 1/24/2019 at 10:09 AM, hppygr8ful said:
One thing I have noticed over the years is how many people are asking about the possibility of student loan forgiveness before they even take out the loan. In my mind this means they don't actually intend to payback the loan in the first place which makes the act theft.
One should never take out a loan without fully intending to pay it back in full. Sure things happen and people fall into financial holes but for the most part nurses make decent money and if one plans their education carefully you do not have to go into extreme debt.

The Public Service Loan Forgiveness program (PSLF) was intended to encourage people to fill positions that have a high cost of entry, while making less money than they would in the private sector, in areas that have a hard time attracting those professions. Unfortunately, student loan servicers made more money putting loans into forbearance. The first round of PSLF applications were processed in September, and 99% of applicants were rejected.

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The PSLF program, backed in the Senate by Ted Kennedy and signed into law by President George W. Bush in 2007, was the first of its kind, and when people talk about “student loan forgiveness,” they’re usually talking about PSLF. It was implemented to address low salaries in public service jobs, where costly degrees are the price of entry but wages often aren’t high enough to pay down debts. A Congressional Budget Office report last year found that public-sector workers with a professional degree or doctorate earn 24 percent less than they would in the private sector. In Massachusetts, a public defender in 2014 made just $40,000, only about $1,000 more than the court’s janitor. Meanwhile, 85 percent of public-interest attorneys in 2015 owed at least $50,000 in federal student loans, according to one study. More than half owed at least $100,000. According to a 2012 study, 65 percent of newly hired nonprofit workers had student debt, and 30 percent owed more than $50,000. In order to keep people working as public defenders, or rural doctors or human rights activists, something had to be done. PSLF was an attempt at a fix.
The program was by no means a handout. Successful PSLF participants, according to one estimate, pay back as much as 91 percent of their original loan amount, so enrollees primarily save on interest. The program’s appeal was that it offered a clear path for people who struggled to pay back loans, or struggled to envision how they would ever pay them off without abandoning public service jobs for higher-paid positions elsewhere.

Home Health Columnist / Guide · Feb 19, 2019

From: The Incredible, Rage-Inducing Inside Story of America’s Student Debt Machine

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In 2017, the bureau issued a report excoriating FedLoan for mismanaging PSLF, misleading borrowers, and losing track of payments. The previous year, the American Bar Association had filed suit against the Education Department for reneging on its own rules about how the program was supposed to work and who was eligible for forgiveness. Then, in August 2017, Massachusetts Attorney General Maura Healey sued FedLoan on behalf of the state’s borrowers, alleging it had overcharged them and bilked them out of payments. And just this January, a set of borrowers filed a class-action suit against the company for repeatedly putting them into needless forbearances that delayed their forgiveness.
A decade after McIlvaine and scores of others began paying into the program, many are only barely closer to their goal of being debt-free. And some are even more in debt than when they started.
Now, the Trump administration has begun disassembling one of the only checks on companies like FedLoan, the Consumer Financial Protection Bureau, all while arguing that these companies are off-limits to state attorneys general like Healey—essentially trying to give them legal protection.

My oldest had Wells Fargo $10,000 loan taken out in 2005 and made monthly payments, few late. Ten years latter, he still owes 6,000 despite making extra months payment to get ahead, only to be told 2 months later, they can not make "future payment". UGH!!

License Suspension for Student Loan Defaulters

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Can you lose your professional license for unpaid student loans? The answer depends on your state and occupation. ...
...In the 1990s, urged by the U.S. Department of Education, states began adopting laws requiring regulatory boards to suspend professional licenses, and even driver’s licenses, if the board received notice from an education commission informing them an applicant held outstanding student loans. Around 2010, at the height of this legislative trend, roughly half of states had some form of license suspension for default (LSD) law in place
A dramatic increase in the percentage of Americans working in licensed fields, combined with rising student loan default rates, brings renewed interest to re-evaluating the purpose and effectiveness of LSD laws. In a bipartisan push, states are now repealing these laws or toning down their enforcement policies.
Proponents of repealing these laws argue that states should not use their licensing authority as a tool of punitive debt collection, and that the core purpose of licensing should be protecting public safety and certifying professional competency. Further, LSD laws force state professional boards to operate as de facto debt collectors for education loans, the vast majority of which are held by the federal government. Proponents also argue that suspending licenses decreases the likelihood that the defaulter will repay the loan, since licensed occupations often pay higher wages than unlicensed jobs.

Supporters of license suspension for default laws counter that the threat of losing a license is a powerful incentive to stay current on loan payments and decreases defaults. They also argue that many of these laws are not as harsh as they seem, only requiring defaulters to enter into a repayment plan to avoid a license suspension. ...
... Many state authorities do not keep a master list of the number of licenses revoked for unpaid loans, and enforcement is up to individual boards. Boards in Kentucky, Louisiana, Tennessee and Texas are considered to be more aggressive with enforcement, while officials in Alaska, Iowa, Hawaii and Massachusetts have said their LSD laws were not being enforced.
At least eight states—Alaska, Georgia, Hawaii, Iowa, Kentucky, Massachusetts, Tennessee and Texas—maintain laws requiring all occupational boards to revoke licenses for defaulting on any type of federal or state education loan. Louisiana will only revoke a license if the professional has defaulted on an education loan issued by the state.
An additional five states—Arkansas, California, Mississippi, Minnesota and Florida—revoke only the licenses of health care professionals for defaulting on education loans. In Arkansas and Mississippi, the laws are even narrower, applying only to state health care education loans and scholarship agreements. For example, defaulting physicians in Arkansas may have their license suspended for “a period of years equivalent to the number of years that the recipient is obligated to practice medicine in a rural area” if they default on an Arkansas Rural Medical Practice Student Loan.
Lastly, two states—Iowa and South Dakota—revoke all state-issued licenses, including driver’s and recreational hunting licenses.
The tide is quickly turning against LSD laws. From 2015 to 2017, Montana, New Jersey, North Dakota and Oklahoma repealed their LSD laws.
During the 2017-2018 sessions, seven states—Alaska, Georgia, Iowa, Louisiana, Massachusetts, South Dakota and Tennessee—introduced legislation repealing LSD laws. In addition, Alaska (SB 4), Illinois (IL SB 2439) and Washington (WA HB 1169) successfully adopted legislation repealing LSD laws....
Federal Action
In June, the U.S. Senate and House introduced companion bills (U.S. SB 3065 / U.S. HR 6156) that would prevent states from revoking or failing to issue professional licenses solely because the applicant defaulted on a federal student loan guaranteed by title IV or a Health Education Assistance Loan. The bills do not prohibit states from taking the aforementioned actions against health care professionals that default on state-issued loans or scholarship agreements such as those outlined in Arkansas §6-81-708 or Mississippi §37-101-291.
If passed, the bills, which have bipartisan support in both chambers, would take effect two years after their adoption date. Notably, SB 3065 is sponsored by U.S. Senators Senator Marco Rubio of Florida and Elizabeth Warren of Massachusetts, and the House bill is sponsored by U.S. Representative Drew Ferguson of Georgia, all states which currently have suspension laws in place.

Note above legislation will need to be reintroduced in 2019 Congressional session.

List of states blocking the renewal of professional licenses for health care professionals for defaulted borrowers of federal student loans available here: How Student Loan Default Affects License Renewals | Edvisors

FolksBtrippin, BSN, RN · Feb 20, 2019

On 1/24/2019 at 10:09 AM, hppygr8ful said:
One thing I have noticed over the years is how many people are asking about the possibility of student loan forgiveness before they even take out the loan. In my mind this means they don't actually intend to payback the loan in the first place which makes the act theft.
One should never take out a loan without fully intending to pay it back in full. Sure things happen and people fall into financial holes but for the most part nurses make decent money and if one plans their education carefully you do not have to go into extreme debt.
I have three college degrees and paid for all of my education in cash. It took longer and I worked the whole time I was in school. I am finishing by BSN at a highly accredited Private University with no debt incurred, because I plan.
Many get into this mess by attending for profit schools because it is a shorter route not paying attention to the fact they have a lower NCLEX pass rate (66%) than public community college program (89%) .
Hppy

I disagree.

Loan forgiveness is set up to attract people into needed professions or locations. Teach nursing school and get 85% of your loan forgiven, for example.

Choosing the loan that offers forgiveness is fiscally smart, not theft.

Kooky Korky, BSN, RN · Feb 22, 2019

On 1/25/2019 at 6:58 AM, Goldenfox said:
You seem a bit judgmental. I remember a time when college education was much more affordable. I also worked full time while I was in school and paid my way through my RN and BSN degrees. But that was all a very long time ago. Most available non-professional jobs these days don't pay enough for young people to work and fully pay for today's college costs out of pocket. And newer accreditation rules no longer allow most health science programs to give students very long to complete their credits anymore either. So, dragging things out while you work to save and do a class here and there in between is no longer a strategy that works for most in modern academia. If a student hasn't finished the degree within x number of years the validity of certain credits become null, and the student has to re-take these credits in order to meet the graduation requirements.
According to you, if a student inquires about student loan forgiveness programs before applying for a loan this means that the student doesn't intend to repay the loan. This is not true. You pride yourself on being a good planner, so you should appreciate that good financial planning means carefully researching all of one's options before making major financial commitments. Student loan forgiveness programs are not a freebie for the new graduate. He or she is trading part of payment for their labor in exchange for a reduction of their student loan balance. This deal works ok form some, but not so great for others---for a variety of reasons.
Students are still being sucked in by the misinformation about college education and student loans. The law requires that they are educated about borrowing this money before they receive it but most still don't really understand. The lenders are charging interest on the loan amounts from day one, and a few thousand dollars easily becomes many thousands of dollars after several years. And a big surprise is waiting for the borrower after graduation when the payments become due.
We don't know for a fact that most graduates default because they never intended to repay from the start. It is possible that many looked for a long time and couldn't find jobs that pay enough for them to pay back the loans AND live on without having to scrounge, so they gave up. Sure, many nurses make decent money---IF they can find a job. In many areas getting a job as a new grad RN isn't so easy anymore. And the pay isn't always so great either. Also, many, MANY new RNs decide after only a short time that they hate bedside nursing and either go back to school or quit the field entirely and take a lower paying job doing something else that they like more. But they still have to pay back the loans, perhaps with even less income, or take out new loans to pursue a different career. There are many variables.
For-profit, or not, college, and the co-conspirator textbook publishers, and the student loan hawks are a major con job on the nation's youth. And government intervention to prevent delinquent borrowers from earning an income was an extremely bad idea, but I'm not surprised that it came from Florida---the worst state in the union for nurses.

Borrowers need to make absolutely sure that they understand what they are getting in to.

TriciaJ, RN · Feb 22, 2019

Let me get this straight: you can kill people and keep your nursing license, but default on your student loan and flip burgers?

NurseSpeedy, ADN, LPN, RN · Feb 26, 2019

I agree that money needs to be repaid if borrowed. I also feel that yanking someone professional license is not the way to go about doing it. There are other ways to go about forcing a payment, if necessary.

I also think that the loans should not be issued as easily as they have been. Sure, it’s claimed that the borrower has to be ‘educated’ prior to taking out the loan, but the way that this ‘education’ is done is ridiculously easy and there’s no way to ensure that the borrower really understands what they are getting into as they click through the boxes of the online mandatory tutorial required for applying for federal student loans. I’m sure an applicant who is fresh out of high school may not realize how much a $500/month loan payment for the next 10 years will really impact their ability to work and maintain a quality of life, especially if they live in a state where nursing pay in particular areas can be total crap (one major home health company pays their LPNs the same as the local grocery store pays their cashiers-and their RNs only $3/hr more).

Maybe the average salary in a given area should be considered before loaning the max amount for each year to anyone who takes a tutorial and signs on the dotted line? A bank will no longer offer a ridiculous mortgage to someone who has no means to pay it. Why are they allowing so many to take out loans that they may not be able to afford, and that’s in the hopes that the individual eventually graduates? Nursing pay can vary greatly depending on the area and let’s face it, not everyone is going to be able to get a job in the most generous locations.

I didn’t take out any loans when I was younger, but I can almost guarantee that if I did I would not have understood the impact as much as I did when I actually had to in my 30’s. I couldn’t imagine owing what some do on their loans each month.

TriciaJ, RN · Mar 4, 2019

The whole student loan industry seems to be quite a racket. Especially when educational institutions have been known to raise their costs to be commensurate with the amount of loan money available.

On a semi-related note: a few years ago I received a letter from my BON stating how glad they were that I had filed an income tax return. Apparently, they were going to be going after nurses who were not filing returns and were doing random audits to that effect. I'm pretty sure I do not pay membership fees so they can be an enforcement arm of other government agencies. The whole thing just rubbed me the wrong way.

Not_A_Hat_Person, RN · May 13, 2019

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Maybe the average salary in a given area should be considered before loaning the max amount for each year to anyone who takes a tutorial and signs on the dotted line?

A field with a lot of high-paying jobs when you start a field of study can have none by the time you finish. Ask anyone who graduated into The Great Recession. I graduated from nursing school in 2008, in a city full of hospitals. NO ONE wanted new grads. Even one-star nursing homes wanted a BSN and 1 year of Med-Surg. It took me 10 months and a 250-mile move to find my first nursing job. Some of my classmates looked for more than a year. Some never found a first job.

Higher Education has become a racket. The student takes all of the financial risk, while everyone else is literally guaranteed to get paid.

myoglobin, ASN, BSN, MSN · May 30, 2019

I would argue that these license revocation laws may be unconstitutional because of "disparate" impact. That is to say they disproportionately penalize those with low income and minorities. Here's the rub in Florida if you are wealthy you can claim a "homestead" exemption and protect your property against creditors (one reason that O.J. moved here back in the day), but if you are poor and default they take your license? If the argument is that "you signed up for the loan so whatever is fine" then we may as well bring back debtors prison (which have been deemed unconstitutional). Stop paying your taxes and the IRS will garnish you, find yourself in a position to default on your student loans, and you will in essence be "made homeless" since you will lose your license. When a collection law is more ruthless than the IRS it should cause everyone to ponder it's equity.

dogperson · Jun 7, 2019

On 1/25/2019 at 6:58 AM, Goldenfox said:
You seem a bit judgmental. I remember a time when college education was much more affordable. I also worked full time while I was in school and paid my way through my RN and BSN degrees. But that was all a very long time ago. Most available non-professional jobs these days don't pay enough for young people to work and fully pay for today's college costs out of pocket. And newer accreditation rules no longer allow most health science programs to give students very long to complete their credits anymore either. So, dragging things out while you work to save and do a class here and there in between is no longer a strategy that works for most in modern academia. If a student hasn't finished the degree within x number of years the validity of certain credits become null, and the student has to re-take these credits in order to meet the graduation requirements.
According to you, if a student inquires about student loan forgiveness programs before applying for a loan this means that the student doesn't intend to repay the loan. This is not true. You pride yourself on being a good planner, so you should appreciate that good financial planning means carefully researching all of one's options before making major financial commitments. Student loan forgiveness programs are not a freebie for the new graduate. He or she is trading part of payment for their labor in exchange for a reduction of their student loan balance. This deal works ok form some, but not so great for others---for a variety of reasons.
Students are still being sucked in by the misinformation about college education and student loans. The law requires that they are educated about borrowing this money before they receive it but most still don't really understand. The lenders are charging interest on the loan amounts from day one, and a few thousand dollars easily becomes many thousands of dollars after several years. And a big surprise is waiting for the borrower after graduation when the payments become due.
We don't know for a fact that most graduates default because they never intended to repay from the start. It is possible that many looked for a long time and couldn't find jobs that pay enough for them to pay back the loans AND live on without having to scrounge, so they gave up. Sure, many nurses make decent money---IF they can find a job. In many areas getting a job as a new grad RN isn't so easy anymore. And the pay isn't always so great either. Also, many, MANY new RNs decide after only a short time that they hate bedside nursing and either go back to school or quit the field entirely and take a lower paying job doing something else that they like more. But they still have to pay back the loans, perhaps with even less income, or take out new loans to pursue a different career. There are many variables.
For-profit, or not, college, and the co-conspirator textbook publishers, and the student loan hawks are a major con job on the nation's youth. And government intervention to prevent delinquent borrowers from earning an income was an extremely bad idea, but I'm not surprised that it came from Florida---the worst state in the union for nurses.

myoglobin, ASN, BSN, MSN · Jun 7, 2019

Also, if you revoke a license for non payment you reduce further the chances of repayment. It would be preferable for everyone to garnish wages like we do most other debt including back taxes.