The most millennial of bills has begun its journey through the state Legislature.
House Bill 42 would prevent the state from suspending the state-issued professional licenses of those who default on government-backed student loans. Whether nurses, insurance agents, or termite exterminators.
“This is a really terrible way to collect debt,” said state Rep. Scot Turner, R-Holly Springs, the bill’s author. “There are plenty of other opportunities for debt collection in the state of Georgia.”
Garnishment and liens, for instance. “We should not remove somebody’s ability to earn a living if they fall behind on their student loans. Then they will not be able to pay their student loans,” Turner told a House committee.
Well, duh, you say. That’s just a debtor’s prison without bars.
In a quickly changing job market that requires more and more technical training, millennials as a generation are carrying more debt than older Americans can imagine. That debt is defining them. And us, too.
In 2005, the average student loan debt for someone between the ages of 24 and 32 was about $5,000, according to a U.S. Federal Reserve study published last month. By 2014, it had doubled. Currently, total U.S. student loan debt stands at $1.5 trillion. The national default rate is about 11 percent, according to other federal stats. Georgia’s default rate is just a tad higher.
Student debt, it can be argued, is already changing the face of metro Atlanta. Much has been made about the region’s shift in attitude when it comes to commuter rail. Millennials don’t want to drive cars and prefer apartment living, Georgia’s corporate recruiters insist.
Environmental concerns and lifestyle choices are factors, to be sure. But so are personal finances.
According to that January study published by the Federal Reserve, in 2005, 45 percent of Americans between the ages of 24 and 32 indulged in home ownership. By 2014, that had dropped to 36 percent.
Higher student loan debt early in life leads to a lower credit score later in life – another factor in reduced vehicle and home ownership.
Very likely, student loan debt even has played a role in the depopulation of rural Georgia. “Individuals with student loan debt are less likely to remain in rural areas than those without it,” according to the study. The more student loan debt you carry, the more likely you are to head for the big city — where employment is more certain.
But back to Scot Turner and HB 42. The first thing to note is that Turner’s bill is primarily, but not entirely, preventative.
According to 2018 calculations by the U.S. Department of Education, 16,538 student loan borrowers are in default in Georgia.
Georgia law specifically allows the state to suspend the professional licenses of those who fall behind on loan payments. How many have actually lost their livelihood as a result is unclear. “Only a handful in the last several years – that we know of,” Turner said.
As a matter of policy, the Georgia Student Finance Commission will first attempt to establish payment plans with those who fall behind. The actual yanking of licenses is left to the professional boards under the purview of the secretary of state.
“When we asked the secretary of state’s office last year, they told us that the records were kept on paper, and so they couldn’t tell us exactly how many, unless we wanted to wait for somebody to go through every single one of them,” Turner said in an interview. “We thought that was a poor use of resources.”
But a policy is subject to change, in which case 16,538 Georgians might be vulnerable. “That was good enough for us,” he said.
Moreover, Turner said, in cases where the student loans are federally guaranteed, federal officials will occasionally insist that Georgia follow its own law and pull the occupational licenses of debtors.
The problem is more serious elsewhere. Two years ago, the New York Times reported that from 2012 to 2017, officials in Tennessee – which has debt collection laws similar to Georgia’s — reported more than 5,400 student loan defaulters to professional licensing agencies. As in Georgia, exactly how many Tennessee professionals have lost their licenses to work isn’t clear.
HB 42, which is expected to be voted out of committee this week, received its first airing last Wednesday before the House Higher Education Committee, chaired by Chuck Martin, R-Alpharetta. Turner apologized for its length of 13 pages, a testament to large number of professions that are licensed in Georgia. The bill starts with pesticide contractors, continues with mortgage brokers, and ends with real estate appraisers.
All in all, the bill was well-received. But some hard questions were asked. Defaulting on a student loan can sometimes be a red flag, said Rep. David Knight, R-Griffin. “You don’t want a stockbroker out there, who is behind on their loans, handling other people’s money,” Knight said.
What may be most interesting about Turner’s measure is its generational nature. Roughly 40 percent of Georgia’s 10 million residents fall between the ages of 24 and 54. These are the people we Baby Boomers will rely on to see us through to the end. In many cases, the amount of student loan debt they wrestle with could determine which nursing homes they choose for us.
That is only part of the wisdom that can be associated with HB 42.
In political terms, this is also the same age group that Republicans in Georgia saw drift into the Democratic camp during last year’s race for governor. Lose more in 2020 and 2022, and GOP control of the state could be a thing of the past.
In other words, the millennial vote in Georgia truly matters now. “This is certainly going to help young people. It’s great for our party,” Turner concedes. At 43, he’s officially classified as a Gen-Xer. But one who’s learning the millennial language.