States Suspend Driver’s Licenses For Defaulted Student Loans

Updated: December 7, 2020|Bill Fay|Students

True or False. Your driver’s license can be suspended if you fail to pay your student loans.

True – If you live in Montana or Iowa.

These states have written laws that state that they can revoke your driver’s license for defaulting on student loans.

Iowa’s law states, “Sanctions can also be imposed for reasons not related to the operation of a motor vehicle, including certain drug offenses and nonpayment of certain financial obligations such as a debt to the state, child support, or a student loan.”

In Montana, defaulting on a student loan can result in “indefinite suspension until student loan association notifies Motor Vehicle Division of compliance.”

There are even more states who’s state that failure to paying your student loans can result in the following:

Revoke your tax return
Garnish your paycheck
Take your federal benefits
Revoke your professional license

There are some states that will allow that professional licenses to be revoked, suspended, or flat-out refuse to certify if the member has defaulted on their student loans.

If you’re having trouble paying back your student loans borrowers do have options to help them. Available options include lowering monthly payments and loan forgiveness.

Have you found a creative or unique way to pay your student loans? SHARE your success and ideas with us on our Facebook page.

Bill Fay

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].