Zachary Berry
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South Dakota Revokes the Driver’s Licenses of Residents Who Fall Behind on Student Loans

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In a state without a substantial public transportation system, the revoking of one's driver's license makes it even harder to find a job and repay back student loans, creating a vicious cycle

Mt. Rushmore

The situation is even more dire for recent grads in the Mount Rushmore State than in other parts of the country
Photo: National Park Service

For many young adults in the United States, student loans can be the largest source of stress in their lives. While these loans can help them pay their way through college, immediately after they graduate, these former students are faced with a growing number of payments they need to make on time.

If the students fall behind on payments or default on their loans, they often face some major consequences. In 20 states, this can result in state-issued professional licenses being revoked.

South Dakota takes things one step further. It will actively revoke the driver’s licenses of students if they fall behind on loans.

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This measure isn’t just a threat or show of force, either. Since the policy was adopted two years ago, nearly 1,000 South Dakota residents have had their driver’s license revoked for late student loan payments and debts owed to state universities. In a state that has an estimated population of just 865,454 residents, this means nearly 1 in 865 South Dakota citizens have had their license revoked over late student loans.

Meanwhile, the Mount Rushmore State is ranked 46th in terms of population density, and like many states in the Great Plains region, it lacks a substantial public transportation system. In short, lacking the ability to drive is a crippling blow to one’s employment in South Dakota.

Already behind on loan payments, those residents who have their licenses revoked find it hard to maintain a steady job without steady transportation, thus causing them to fall into even more debt and making it even more difficult to pay back their student loans and reclaim their licenses. Entering a payment plan is one avenue that those affected could pursue, but most plans are beyond the means of these individuals.

Without an expansive public transportation system, revoking a driver’s license is practically a death knell to one’s employment status in South Dakota
Photo: Green Lane

The South Dakota government, for its part, believes that the program is operating swimmingly. The debt collection center of the state has already brought in $3.3 million since the program was adopted.

However, even some of the state’s officials have criticized the program. Calling it shortsighted, Jeff Barth, a commissioner in South Dakota’s Minnehaha County, argued that having those affected actually be employed would be better for South Dakota’s economy in the long run.

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Unsurprisingly, the newly-adopted program has been discouraging South Dakota residents from attending college in their home state. An exodus of college-educated residents will undoubtedly have consequences for South Dakota in the near future.

The New York Times states that Iowa has a similar policy on the books, but has not enforced it in the last five years. Meanwhile, Montana recently rolled back a measure similar to South Dakota’s own, leaving South Dakota a state alone in terms of enforcing this policy.

News Sources: The New York Times