A garnishment takes a lot of work and time. You have to go to court, get a judgment on the debt, try to collect and when that doesn’t work you get an order of garnishment. Then you have to serve that order of garnishment on the bank or the employer and hope there is money in the account or money owed to the employee. All that costs a great deal (the filing fee to open the suit, the lawyer, the fee to get the garnishment order and the fee to serve it - all added to the debt) The amount that can be garnished is limited by state and federal law, may depend if it is a joint account (notice given to a joint account holder) and whether there are other orders of garnishment ahead of this creditor (IRS will bump everyone down the line). It takes time and fees increase the debt. Some federal debts can garnish without a judgment but no private debt can be.
This withholding licenses is just one way of collection, and it works. The licensing board doesn’t have to deal with the actual collection, but just gets a list of who owes money and who can’t get a licensed renewed. Then it gets another list of who has paid the loans (up to date or in full).