Incarcerated Borrower Relief

Currently, most borrowers entering prison end up going into default because they are unable to make payments or even contact their servicer about available options. In fact, a recent analysis from the Student Borrower Protection Center found that nearly 100% of incarcerated student loan borrowers were in default.

“The vast majority of prison education programs are dependent on Pell funding,” said Amber Saddler, counsel at the SBPC. “If you’re in default, this new opportunity for prison education is closed to you.”

The lawsuit filed by the Student Borrower Protection Center (SBPC) comes on the heels of the nonprofit’s new report, finding that 100 percent of 57 incarcerated individuals part of a data study are currently in default—due to barriers in accessing Pell Grants, and the holdup of student debt relief that is currently being deliberated by the U.S. Supreme Court. Although the data subset is relatively minute, they believe the numbers are higher across…

Amajority of student loan borrowers who are incarcerated have likely defaulted on their loans and would benefit from President Biden’s debt-relief plan, a new report from the Student Borrower Protection Center argues.

The Student Borrower Protection Center (SBPC) today sued the federal government and issued a report on the student loan experience for incarcerated borrowers. In its first lawsuit against the U.S. Department of Education, SBPC is seeking to compel the production of documents under the Freedom of Information Act (FOIA). The request concerns the federal government policy for writing off defaulted federal student loans of borrowers incarcerated for periods of 10 years or more.

The Student Borrower Protection Center, or SBPC, said in a lawsuit filed Tuesday that though the Education Department worked with the organization when it first asked for the records in November 2021, it has since gone silent.

Nearly 250,000 of the nation’s 2.3 million prisoners are burdened with student debt they cannot pay because of their imprisonment. A July 2022 joint report by the Student Borrower Protection Center and National Consumer Law Center noted that prisoners earn pennies an hour, if they are paid at all. They can’t afford postage, much less debt payments, and accessing their trust funds often takes weeks. This practically ensures late payments.

“Almost every borrower who’s incarcerated that we’ve come across has been in default,” said Amber Saddler, counsel for Student Borrower Protection Amber Saddler, counsel for Student Borrower Protection CenterAmber Saddler, counsel for Student Borrower Protection CenterCenter. “And the consequences of default are enormous.

A recent study by the Student Borrower Protection Center and the National Consumer Law Center found borrowers in prison are at higher risk of default on their student loans due to limited access to phones and internet needed to communicate with their loan servicer.

The Student Borrower Protection Center published a new report Wednesday on the challenges that incarcerated student loan borrowers face, including debt collection and risk of default.