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Media Press Releases New Report Reveals Cancellation is Only Viable Path Forward for Incarcerated Student Loan Borrowers

New Report Reveals Cancellation is Only Viable Path Forward for Incarcerated Student Loan Borrowers

Seeking Additional Information, Advocates Sue Education Department for Withholding Incarcerated Borrower Data and Policies for Nearly Two Years

June 20, 2023 | WASHINGTON, D.C. — The Student Borrower Protection Center (SBPC) released today the results of a groundbreaking analysis finding that an alarming 100 percent of the incarcerated federal student loan borrowers enrolled in Higher Education in Prison (HEP) programs across several correctional facilities are currently in default—a barrier to accessing the Pell Grant—and that over 90 percent of these borrowers could be made debt-free under President Biden’s debt relief plan that is currently being held up by the U.S. Supreme Court.

A copy of SBPC’s new report on the challenges facing incarcerated borrowers is available here: Collection At All Costs: Unlocking Cancellation for Incarcerated Borrowers

At the same time, the SBPC is launching its first lawsuit against the U.S. Department of Education (the Department) for illegally withholding critical data and policies on its treatment of incarcerated borrowers. The report’s findings make clear the urgent necessity that the Department provide more data and information about its treatment of these borrowers as required by the law.

A copy of the complaint in SBPC v. U.S. Department of Education, filed today in D.C. District Court, is available here.

On July 1, as part of the Biden-Harris Administration’s broader efforts to support reentry, empower formerly incarcerated persons, enhance public safety, and strengthen our communities and our economy, the Department announced plans to dramatically expand access to Pell Grants to students enrolling in qualified Prison Education Programs (PEPs). PEPs are postsecondary learning opportunities offered to incarcerated people via partnerships between their prisons or jails and nearby colleges. PEPs’ offerings range from non-credit courses to full degree-granting programs. Incarcerated students enrolled in higher education programs are shown to experience an increased likelihood of successful community re-entry and decreased rates of repeated conviction.

“Formerly incarcerated individuals routinely face discrimination in searches for employment and housing due to their criminal records, and student debt is compounding these problems,” said SBPC Counsel Amber Saddler. “Cancelling the debt of incarcerated student loan borrowers is a matter of racial and economic justice—it is good for incarcerated borrowers, and it is good for our communities at large. The Administration must uphold its commitment to supporting incarcerated individuals by eliminating barriers to higher education in prison and ending the cycle of student loan default by automatically and systematically applying cancellation to incarcerated borrowers’ accounts.”

“The obstacles are insurmountable for incarcerated borrowers to avoid the worst pitfalls of the student loan system,” said SBPC Deputy Executive Director and Managing Counsel, Persis Yu. “This snapshot is a rude awakening for the Department. This first-ever look at borrowers behind bars shows that any solution other than cancelling this debt will only continue this cruel system.”

SBPC’s report revealed that:

  • More than 90 percent of the borrowers in this case study owed less than $20,000 and could therefore see their debt completely wiped out by the President’s cancellation plan. 
  • Fully 100 percent of these borrowers were in default on their federal student loans, compared to only about 20 percent of all student loan borrowers before COVID.
  • Without student loan cancellation, most incarcerated borrowers will be locked out of higher education and the improved post-release outcomes it brings, since PEPs will be reliant upon federal student aid and will likely turn away Pell Grant-ineligible individuals who are unable to fund their own educations.


On November 29, 2021, SBPC requested documents and data related to the Department’s guidance and policies involving incarcerated borrowers. This information is critical for understanding the size and scope of the student debt crisis facing incarcerated borrowers. Despite the Freedom of Information Act’s (FOIA) requirement to turn over these documents in a timely manner or provide an explanation for a failure to do so, the Department has maintained a year and a half of radio silence while incarcerated borrowers languish in default. The complaint urges the court to compel the Department to finally respond to SBPC’s FOIA request. Doing so would finally provide the data that will enable advocates and legal aid organizations to assist incarcerated borrowers through the student debt crisis.

This report builds on a prior SBPC and National Consumer Law Center (NCLC) report, Collection At All Costs: Examining the Intersection of Mass Incarceration and the Student Debt Crisis, which detailed the ways the inherent conditions of the prison environment compound the failures of the student loan servicing system to drive incarcerated borrowers overwhelmingly into default. Correctional facilities’ restrictions on computer and internet access, costly telephone and mailing fees, and extremely low (or no) wages make it uniquely difficult for incarcerated borrowers to navigate the servicer abuses and administrative roadblocks that characterize the student loan system. It is long past time that the Department recognize and reform the unduly punitive consequences of owing federal student loans while incarcerated.

As the Department begins to implement its plan to expand Pell Grant eligibility for incarcerated students enrolling in PEPs, servicing for incarcerated borrowers is at an inflection point. It is imperative that the Department pair Pell Grant expansion with relief for borrowers stuck at the intersection of the student loan and criminal legal systems. Without cancellation, individuals who sought higher education before incarceration—and who are overwhelmingly in default—will be locked out of the Administration’s promise of increased education access and support as they reenter their communities. Additionally, this potential disparity in education opportunity will only deepen the existing racial inequities entrenched in the student loan and criminal legal systems. The Department must act now to protect borrowers trapped at the intersection of the student debt and mass incarceration crises.


About Student Borrower Protection Center

The Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice for all.

Learn more at or follow SBPC on Twitter @theSBPC.

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