HB 1071 -- Professional Licenses of Student Loan Defaulters

Sponsor:  Hosmer

This bill provides for the revocation, suspension, nonrenewal, or
nonissuance of professional licenses of those in default on the
repayment of any student loan guaranteed or administered by the
Department of Higher Education under certain circumstances
defined in the bill.

Under the bill, the Department of Higher Education is required
to:

(1)  Provide the names of defaulters who have not made
satisfactory repayment arrangements to the Director of the
Division of Professional Registration, the State Board of
Education, the Clerk of the Supreme Court, and the Director of
the Department of Insurance; and

(2)  Establish a procedure for determining when a person has made
satisfactory arrangements to ensure repayment of a defaulted loan
and to send notice within 60 days to licensing agencies when the
arrangements have been made.

The department is authorized to garnish any state payment to
defaulters, including income tax refunds and lottery winnings.

The bill provides appeal procedures for persons aggrieved by
decisions made by the department.

The following actions are authorized when defaulters have not
made satisfactory arrangements to ensure repayment:

(1)  Licenses to teach will not be issued or renewed and will be
suspended or revoked by the State Board of Education;

(2)  Licenses for insurance agents and brokers will not be issued
or renewed by the Department of Insurance; and licenses for those
regulated by boards and commissions within the Division of
Professional Registration will not be issued or renewed; and

(3)  Applicants will not be allowed to take the bar exam and will
not be admitted to the Missouri Bar; attorneys will not be
allowed to renew their licenses.  The bill also specifies that
attorneys who in bad faith avoid the repayment of any student
loan have engaged in professional misconduct and may be removed
or suspended from practice.  If a student loan is discharged by a
bankruptcy proceeding, an attorney's behavior may be reviewed to
determine if it constitutes bad faith.

The bill prohibits adverse licensing actions when the most recent
notice from the Department of Higher Education indicates that
satisfactory arrangements to ensure repayment have been made.
The Division of Professional Registration must indicate in its
registry of licensees the student loan repayment status of each
licensee.

The provisions applicable to insurance licenses become effective
January 1, 2003.

Missouri House of Representatives
Last Updated October 11, 2002 at 9:00 am