Cox Applauds Passage of HB 532: Will Authorize Collection of Defaulted Federal Student Loans From Georgia Licensed Professionals

ATLANTA  … Secretary of State Cathy Cox today applauded final passage by the General Assembly earlier this week of H.B. 532, which authorizes the suspension of professional licenses for Georgians who default on their federally-guaranteed student loans.

The bill expands an existing Secretary of State program, enacted in 1998, authrorizing the Secretary of State’s Professional Licensing Boards Division (nursing, dentistry, chiropractors, engineers, etc.) to suspend the licenses of those who have failed to pay their state-guaranteed student loans. The program has already resulted in the collection of over $1.6 million from 744 professionals who were in default on their loan obligations.

In addition to the more than 350,000 Georgians licensed by the Secretary of State’s office, nearly  $2 million in additional loan re-payments have been collected from real estate agents, insurance salesmen and teachers, professions that are also included in the suspension programs.

The new measure, sponsored on behalf of Secretary Cox by Representative Carolyn Hugley (D-Columbus), is the result of a collaboration between the Secretary of State, the FBI and other federal agencies responsible for collecting defaulted federal loans.  The new suspension authority will be a valuable tool to collect an estimated $14 million in overdue or unpaid loans from Georgia professionals. These loans are primarily federal Health Education Assistance Loans (HEAL) for medical professionals like dentists, podiatrists and chiropractors.

"The addition of the federal student loan provision to our license suspension program makes clear that Georgia professionals must repay the debt they owe to the taxpayers of our state and nation." said Secretary Cox. "When borrowers fail to meet their student loan obligations, it is the taxpayer that is left to pick up the tab.  I am pleased that our efforts have already resulted in the collection of millions of dollars in overdue payments, and this enhancement in our successful program provides the opportunity to secure repayment of millions more.  These programs make it very clear: If you fail to repay your student loan you will lose or be denied your license to work in Georgia," Cox added.

The Secretary of State’s office, in conjunction with the Department of Human Resources, also administers a license suspension program that applies to those who fail to pay court-ordered child support.  This successful initiative, originally enacted in 1996, has led to the payment of several million dollars to custodial parents and their children.

Since its inception in March, 1999 the Professional Licensing Suspension Program with five agencies and commissions actively participating resulted in the following actions:

Source: Georgia Student Finance Commission