Could Debt Cost You Your Job?
How you choose to spend your money is entirely your prerogative. Your employer has no say in the debt you accumulate. But what happens when you are trying to get a new job? Could that debt prevent you from gaining employment?
According to a new report from CNBC, government agencies in 19 states can take away state-issued professional licenses from people who default on student loans. That means nurses, firefighters, emergency medical technicians, barbers and psychologists can lose the certifications that allow them to work—all because they are behind on their student loans.
In South Dakota, the government can take away a driver’s license because of student loan debt, making it difficult to find employment. Not having a driver’s license may have little effect in an area with easy-access to public transportation, but in most Midwestern states, transit is almost entirely reliant on vehicles. No driver’s license means no reliable way to get to work, and employers usually don’t want to take that chance.
Since debt negatively impacts your credit score, it could prevent you from working in positions that deal with money. Banks, credit unions, payday lenders and property management firms typically run credit checks during their applicant evaluations to determine who they want to hire. An employer may not trust you with the money if he does not believe you handle your own money well.
In many ways, this is a double-edged sword. You need money to pay off debt, but having debt may prevent you from earning money. If you currently have a job, keep up with your student loan payments and other debts to ensure your job security. Public records show at least 8,700 professional licenses have been seized because of student loan defaults, and that may only be a fraction of the true number.
If you do not have a job and have delinquent debt, talk to your potential employer about the payments you will make once you have employment. Create a clear plan of repayment that shows you indeed know how to manage money. If you live in a state where they can take your professional license from you, talk to your student loan provider about how to stay on good terms with them. They can set up an affordable payment program to get you out of default so you can keep your license.