Policy Briefing

Student Loan Default and State Licensing Board Discipline

Posted 03/04/2019
NCSBN issues letter of support for the Protecting JOBs Act, which would prevent states from disciplining licensees purely due to their failure to make student loan payments.

In November 2017, the New York Times published an article highlighting multiple reports of states taking disciplinary action against licensees in different professions, including nursing, that have defaulted on their student loans. Since the article was published, regulatory bodies have been under increasing pressure with some organizations asking what role these policies play in protecting the public and why state licensing boards should play a role in student loan debt collection.

Currently NCSBN Model Rules (Chapter 7.3) considers, “defaulting on health education loan or scholarship obligations pursuant to the procedural laws and rules of the jurisdiction,” as grounds for discipline. The Board of Directors established a Model Act and Rules Committee and recommended, “That the Model Act and Rules Committee remove student loan default as grounds for discipline in any revision of the Model Rules to go before the Delegate Assembly.” The Committee will be revising the Model Act and Rules over the next year and NCSBN’s Delegate Assembly will consider revised versions of both documents in August 2020.

On February 3, 2021, Senator Marco Rubio (R-FL) and Senator Elizabeth Warren (D-MA) introduced the Protecting Job Opportunities for Borrowers (Protecting JOBs) Act, (S. 210). The Protecting JOBs Act would prevent states from suspending, revoking, or denying state licenses, in the event that a licensee defaults on his or her federal student loans. The legislation would take effect two years after becoming law in order to give states time to comply with the change. The legislation also would provide for injunctive relief for aggrieved individuals by allowing them to bring a civil action in a U.S. District Court against “an individual State officer in the officer’s official capacity.”

A subsequent NYT article highlighted the new legislation. NCSBN members can find out which states have this policy by checking out the NCSBN Member Profiles. NCSBN Government Affairs Staff sent a letter to Sen. Rubio, and Sen. Warren expressing support for the bill.

As is stated in our mission, NCSBN promotes evidence-based policies that protect the public from harm, while striving to reduce the burden of government. There is no evidence that suspending a nurse’s professional license due to student loan default hinders their ability to provide safe, competent care to patients. NCSBN’s letter of support for the Protecting JOBs Act received positive responses from the bill’s sponsors, including a tweet from Sen. Rubio’s office.

Government Affairs staff will provide updates as it moves through committees and towards votes. For members, the letter of support can be found on this page and in the Policy Knowledge Network. If you have any questions, please reach out to us at governmentaffairs@ncsbn.org.