State may go after student loans

Advertiser Staff

To keep Hawai'i residents from defaulting on federal and state student loans, a state legislator is proposing that those who do not repay their debts have their professional licenses suspended or denied.

Rep. Bertha Kawakami, D-14th (Koloa, Waimea, Ni'ihau), said she is introducing the bill because the state has more than 1,000 delinquent University of Hawai'i student loans that have cost the state more than $2 million. Two federal loan programs report Hawai'i as having the 11th-highest default rate in the nation, she said.

Kawakami's bill will would authorize licensing agencies to suspend or deny the professional licenses of anyone who has not repaid loans, including those in health care, construction, finance and other highly skilled trades.

"Student loans provide an excellent opportunity and make higher education a possibility for all, and it is important that those who make use of this economic benefit fulfill their financial obligations," Kawakami said. "Suspending their licenses to practice will both encourage repayment and deter future defaulters."

Similar legislation was enacted recently in Maryland, Texas, Georgia and New York.