You can face multiple consequences if you default on your student loans. The possible consequences include lower credit scores, wage garnishment and thousands of dollars in fees. However, there could also be professional consequences for defaulting. You could have your professional license suspended or made ineligible for renewal.
While Missouri and Kansas licensure boards will not take away your professional license for defaulting, you may run into problems if you move to another state.
How you could be affected depends on the state and other factors. In Texas, licensing agencies will not renew your professional license if you are in default. This applies to all professions. In Illinois, licensing agencies can deny you a professional license or they can refuse to renew one.
States also have different rules for how you can contest or correct your student loan default. You should determine your state’s options for scheduling a hearing or entering a repayment plan if you are at risk of losing your professional license from a student loan default.
What If I Have Defaulted or Am About to Default?
The best way to avoid losing your professional license is to not default in the first place. If you are having trouble making payments, then you should consider enrolling in an income-driven repayment plan. You could also see if you are eligible for an economic hardship deferment. These options are available for borrowers with federal student loans in good standing.
Private loans are trickier. You may not have the option of enrolling in an income-driven repayment plan. Your lender may not allow you to suspend payments. Still, it would not hurt to contact your lender to see if they will work with you on making your payments more affordable.
Once you have defaulted, your options for bringing your loans back into good standing can vary. If you have federal student loans, then you might be able to combine your defaulted loans into a Direct Consolidation Loan. The Department of Education also has a loan rehabilitation program that can bring your student loans back into good standing.
If you have more questions about student loans and debt relief, then you should speak to one of the Kansas City student loan lawyers at The Sader Law Firm. For future updates on student loan tips and news, follow us on Facebook and Twitter.