South Dakota Suspending Driver’s Licenses for Unpaid Student Loans

By: Ryan Gallagher December 4, 2017
Student loans debt can be crippling in multiple ways—some states, including South Dakota, will suspend driver's licenses in order to collect.
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As if the pressure of paying student loans wasn’t crushing enough, South Dakota motorists could face driver’s license suspension for missed loan payments due to a law passed in 2015.

In the last two years, nearly 1,000 South Dakota residents have been stripped of their driving privileges because of outstanding debt owed to South Dakota universities. Oftentimes, these license suspensions hurt a person’s ability to get to work—making it even more difficult for the indebted to pay off their loans.

Take, for example, the story of Vermillion, South Dakota’s Morgan McDonald. McDonald—a former student at the University of South Dakota—owed an outstanding $2,400 on a student loan when a highway patroller pulled her over for having a taped window on her vehicle. Instead of returning with a ticket, the officer informed McDonald her license was suspended. Until she comes up with at least $1,212, McDonald, a delivery driver, cannot recover her driving privileges.

In the last year, the state’s debt collection center has brought in $3.3 million from people like McDonald. While the rules may have raised some needed cash, others don’t think the regulations are fair.

“I don’t like people skipping out on their debts,” said Jeff Barth, a commissioner in South Dakota’s Minnehaha County, “but the state is taking a pound of flesh.”

In a similar fashion, 19 other states can seize state-issued professional licenses from citizens, which allow individuals to practice law, real estate, nursing, teaching, and firefighting, among other professions.

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