With Presidential candidates revealing plans to forgive billions of dollars in student loan debt, it no surprise that the conversation has centered around debt incurred at four-year universities. But four-year universities are hardly the only place students are racking up thousands in debt.
Students around the country are also undergoing significant debt in order to meet occupational licensing requirements. Occupational licenses are essentially government permission slips in order to work in a certain profession. For example, to receive an occupation license to become a cosmetologist in Louisiana, one must undergo 1500 hours of education as well as pay a fee and pass multiple exams administered by the state.
This can lead to thousands or even tens of thousands in student loan debt to meet those requirements.
But like a college degree, an occupational license is no guarantee of a steady income leading to many students having issues paying back their student loans in a timely fashion.
Unlike college degrees however, the government in Louisiana is allowed to take back an occupational license.
Louisiana is currently one of only 13 states across the nation that will revoke an occupational license for falling behind on student loan payments. These policies have been enacted with the intention of motivating borrowers to pay off their loans. Instead, they’ve had the opposite effect of further preventing those with student debt from working in the very field that provides for their livelihood.
With their license revoked, people are left without their primary source of income with which they would have paid off their loans. Furthermore, many Louisianans will inevitably find themselves unable to provide food, shelter, and other necessities for themselves and their families without their license.
Its reminiscent of the 18th century debtors’ prison.
The Catch-22 here becomes abundantly clear, as the state forces individuals to spend thousands of dollars in order to work, only to take it away when they fall behind on payments.
Policies like these serve to only worsen an already poor economic outlook in our state. According to a report by the Institute for Justice that studied the licensure of 102 lower-income occupations across the country, Louisiana tops the nation with 77 of 102 occupations licensed. The report ranks Louisiana as the 6th most broadly and onerously licensed state in the nation. To learn more about how Louisiana licenses more than any other state and the Pelican Institute’s plan for reforming these barriers to jobs and opportunity, you can read our full regulatory policy paper here.
Thankfully, policymakers in Baton Rouge are taking steps to right this wrong, as HB 423 by Representative Julie Emerson (R-Carencro) passed through the House this week with a vote of 90-0. HB 423 repeals this counterintuitive regulation and will allow hard-working Louisianans the opportunity to stay employed so that they can continue to pay off their loans and provide for their families.
Louisiana legislators understand that keeping Louisianans employed and earning a living is the best way to move our state forward, and repealing this counter intuitive regulation is a solid step toward a Louisiana where every citizen can find and maintain a steady living. Ensuring that Louisiana workers are able to find and maintain employment after they’ve received their license to work not only gives them a better pathway to paying off their loans, it also provides a better pathway to jobs and opportunity.