Save Yourself from Student Debt with Online Education
Tom Kerr writing on online education…
I wrote yesterday about how people like you and me…who are at or near retirement age…are saddled with student loan debts that threaten our financial safety and wellbeing. (If you missed it, you can find it here.)
But now I have news for you that may be even scarier and more unbelievable.
If you fail to repay your student loan obligations – which is a real possibility for millions of older Americans – the government may be able to suspend or revoke your license. I’m not just talking about your all-important license to drive a vehicle…which for me represents a fundamental freedom.
The suspension may also extend to any profession that requires licensing…whether you work as a barber, a nurse, a police officer, a school teacher, or dozens of other licensed jobs.
As Bloomberg News reported in 2015, Montana suspended more than 90 licenses since 2007, because residents defaulted on student loans. As of 2012, Iowa had suspended 10 times that many licenses. But that is small potatoes compared to Tennessee…where more than 1,500 licenses – required to practice a wide range of professions – have been suspended.
I have a close friend who took out student loans when she was still in her 20s. Now she is nearly retirement age…but her student loan debt is probably her biggest financial obstacle. I warned her not to default, no matter what, because unpaid student loans can destroy other facets of your life – including your very livelihood.
It’s a lot harder to earn money and pay off a big debt if you cannot legally drive a vehicle or if you lose the credentials you need in order to practice your trade or career specialty.
Many such laws were passed 20 or 30 years ago, at a time when the federal government played a much smaller part in the funding of student loans. Back then, state treasuries often held lots of tuition debt. Lawmakers reasoned that if you had a driver’s license or a license required to do work in a particular profession, they would not have to track you down and find you if you defaulted on your loan. You’d eventually show up voluntarily to renew your license…and then they could confiscate it or otherwise suspend or withhold it until you paid off your student loans.
Because so many of the laws are still in place, if you default on a student loan your license might be kept hostage until you pay the ransom. Default on a federal loan and it can also mean you inadvertently make yourself disqualified to hold a government position or one of many local, state, or federal jobs. That may extend to military service or work as a government contractor…as well as any career you may aspire to that requires a federal security clearance.
A list of the states with these kinds of laws on the books includes North Dakota, California, New Mexico, Oklahoma, Texas, Louisiana, Alabama, Mississippi, Georgia, Florida, Kentucky, Virginia, Illinois, New Jersey, Massachusetts, Minnesota, Washington, Alaska, and Hawaii.
Going into debt, even to pay for education – which is one of the best investments you can possibly make – can have unintended and far-reaching negative consequences.
Fortunately, downsizing and learning to live a simple lifestyle doesn’t require a license…or expensive tuition.
I’ve taken advantage of free and low-cost learning opportunities my whole life. Nowadays, there are more than ever before. You can learn or brush-up on computer, math, or foreign language skills, for example, using free online resources.
Community colleges offer career training and continual education classes that are very affordable, and you don’t have to be enrolled as a full-time student.
I learned brick masonry that way, attending two classes a week for a few months.
I have a powerful aversion to debt…but I am a diehard devotee of lifelong learning.
P.S. Discover how you can enjoy a more laidback, authentic, independent way of life in The Savvy Retiree Daily. Sign up below to have it delivered – free of charge – to your email inbox.