Working student loan debtors bill advances

Rep. James Allen Tipton, R-Taylorsville

FRANKFORT – The Keep Americans Working Act of 2019 advanced out of a Senate committee today.

The act, known as House Bill 118, would prohibit someone from having their occupational license suspended or revoked because they are delinquent on a student loan or work-conditional scholarship. It would also encourage a person who is in default or delinquent in the payment of a student loan to contact the appropriate student loan servicer to establish a voluntary pay agreement.

Sponsor Rep. James Tipton, R-Taylorsville, told the Senate Licensing, Occupations and Administrative Regulations Committee the Kentucky Higher Education Assistance Authority (KHEAA) is actually required to report if the student is in default to the licensing authority under existing statute. He said that could result in the licensing authority revoking that individuals’ license.

He cited some recent reports on student loan debt. The latest student loan debt statistics for 2019 state there are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt across the nation. Borrowers in the Class of 2017, on average, owe $28,650, according to the Institute for College Access and Success.

Majority Floor Leader Damon Thayer, R-Georgetown, asked whether HB 118 would allow someone to get out of their student loan obligation.

Erin Klarer of KHEAA testified that would not be the case. She explained that KHEAA would retain other means to collect on delinquent loans including seizing tax returns and lottery winnings as well as garnishing wages. She added that there are a number of different repayment plans for borrows so they never reach default.

Thayer said he supported HB 118 before reading this sentence taken from the bill language:

“The purpose of … this act is to ensure that hard-working Americans keep their occupational licenses while struggling to pay off student loan debt, keeping them out of welfare, out of poverty, and in the workforce.”

HB 118 was placed on the Senate consent calendar, a list of bills having had one or two readings, and on which members in attendance are presumed to vote yes unless they indicate a negative vote prior to the call of the roll.

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