If you go to prison, what are you gonna do about your student loans? This might sound a little funny because you probably aren’t thinking about your student debt if you go to prison because you probably have got bigger things on your mind. But it’s a bigger deal than you think. First off, 5% of the population goes to prison or jail at some point in their lives.
That’s a large number of the population.Also there’s 44 million student loan borrowers, so naturally there’s probably hundreds of thousands of people that will go to prison at some point that have student loan debt and it’s going to be very difficult to make payments while still in jail if you don’t have a plan. So the first thing to realize is that if you default on your student loans, that will last on your credit report for seven years. That will hurt your prospects for getting credit when you get out and it will hurt your chances of
re-entering into society and being financially successful and re-establishing yourself as a productive member of society.
So what’s really important if you go to prison is to add an authorized agent to your student loan account. Most all student loan servicers allow this option for you to add anauthorized agent and that agent can acton your behalf, can call and ask questions, and can also make payments, and you will not have to have your student loans enter into a period of default.
So this is very important for people who are going to be locked up for an extended period of a couple years or more because you want the best chance of serving your time, doing your duty to society for what you did, and then when you come out you want to be a productive member of society. So the worst thing that you could do is come out with a bunch of defaults on your record from having gone to prison, because then
you’re gonna be subject to loan sharks and payday loans and you’re just not going to have easy access to credit, which could put you at higher risk of doing something that might make you go back.
So it’s a lot bigger of asocial justice issue figuring out how to deal with student loans if you’re ever
in prison than you think it is. And if you know somebody that is in prison that has student debt, maybe you can utilize this knowledge to help them out. Get them signed up for an income based repayment program like the PAYE program,Pay As You Earn. There’s other programs as well that can allow their payments to be$0 a month when they’re locked up and then that $0 a month payment also can count towards loan forgiveness.
In some cases, if you’re in a federal facility and you’re working full time for one of the organizations that employ federal prisoners, then that credit might actually even qualify you towards working towards the PSLF program, which would forgive your student loans after ten years tax-free of working. So there’s all kinds of options for people who are locked up to turn their lives around, even though they have debt when they go in, and there are much better options than defaulting and not making payments. So hopefully this is helpful to you if just for curiosity’s sake, hopefully you don’t need to use this, but maybe you know somebody in your family, or know of someone who’s going through something like this, and you can use it to help them. Thanks so much.