Defaulting on a Student Loan Can Cost You Your Law License

By Mark Wilson, Esq. on April 07, 2015 | Last updated on February 07, 2023

The average law school debt for private schools is $125,000, and for public schools, $75,700, ABA Journal reported in 2012. That's a lot of debt -- and if it comes from federal student loans (which it probably does), the debt isn't dischargeable, even in bankruptcy, except for some very specific (and hard to prove) situations. And that's the good news. The bad news is that, if you default on your student loans, you might even place your professional certification -- or even driver's license -- at risk.

But I Need My Locksmithing License

According to the National Consumer Law Center, 22 states authorize suspending different kinds of licenses -- including that law license that you just spent $125,000 to get. Washington, for example, specifically allows the state supreme court to suspend or disbar a lawyer who defaults on a federal or state student loan. Oh, but it doesn't stop there. Washington also authorizes suspending licenses for auctioneers, poison control specialists, plumbers, and bail bondsmen if they don't pay back their loans -- and that's just to name a few. (Landscape architects, you're on notice, too!) California, strangely, authorizes only denying a license or denying the renewal of a license to a "health care practitioner," which includes all manner of physicians, laboratory technicians, chiropractors, dentists, physical therapists, midwives, and licensed social workers. Iowa appears to be the only state where a regular passenger driver's license can be suspended, as well. Oklahoma authorizes suspending only commercial driver's licenses.

Pay Your Loans

The Department of Education (DOE) considers a student loan in default if no payment has been received for 270 consecutive days. But if you thought you could "wait out" the government, think again: There is no statute of limitations for federal student loans, so government inaction today is no guarantee that they won't come back in 20 years. Just because you may have received a loan from a private lender doesn't mean the loan is private. Prior to 2010, DOE contracted with private loan servicers to deliver and service student loans. Now, DOE services the loans itself, but pre-2010 loans issued by private servicers were federally guaranteed, meaning they're federal loans without a statute of limitations for collection. So, pay your student loans. You don't want to have your law license -- or worse, your cosmetology license -- suspended. Related Resources:
Copied to clipboard