Student Financial Aid Eligibility
Money for College During Incarceration
You are generally not eligible for federal student loans if you are incarcerated. However, if you want to pursue education while you are incarcerated, you may be eligible for a Pell grant to help you pay for this. Currently, Pell grants are offered to incarcerated students through the Second Chance Pell program. This program will end in June 2023. New rules will begin on July 1, 2023 that will allow more people to get Pell grants to pay for eligible Prison Education Programs. The Department of Education is currently working on creating a website with more information about eligible Prison Education Programs, and we will update this page as soon as it is released.
If you are not eligible for a Pell grant, you can pay tuition for college education out of pocket or seek funding through state correctional departments. Private foundations such as the Lumina Foundation have also funded programs to expand higher education opportunities for people while incarcerated.
Money for College After Release
Most student aid restrictions are removed after you are released. In fact, you may apply for aid before you’re released so your aid is processed in time for you to start school. However, your eligibility may be limited if your incarceration was for a sexual offense and you are subject to an involuntary civil commitment after you are released from incarceration for that offense.
Note: Drug convictions no longer prevent you from receiving federal student aid.
Dealing with Student Loan Debt During Incarceration
If you had student loan debt before you were incarcerated, you may be able to get some relief.
Repayment During Incarceration
If you are not in default on your student loans, the Department of Education has said that it cannot stop servicing and collection activities while you are incarcerated. However, you may be eligible for loan relief available to all borrowers to help you manage your loans while incarcerated, such as income-driven repayment, deferment, or forbearance.
It is important to avoid defaulting on your loans while you are incarcerated, as the consequences of defaulting could impact your options for dealing with the debt later. If you cannot afford to pay your student loans while you are incarcerated, you can ask your loan servicer about your options for dealing with repayment, including deferment, forbearance, or an income-driven repayment plan. On an income-driven repayment plan, your monthly payment could be as low as $0 per month.
The Department of Education announced in April 2022 that incarcerated borrowers in default may consolidate their student loans to get out of default and access options like deferments, forbearances, and income-driven repayment.
Additionally, incarcerated borrowers may benefit from the Fresh Start initiative in late 2022 and 2023. Under the Fresh Start initiative, people with eligible defaulted federal student loans can now apply for new federal student aid, including Pell grants for incarcerated students, to help them complete their education. The eligible defaulted loans will then be put back into good standing. Additionally, people with eligible defaulted federal student loans will be able to use a streamlined process to get out of default and access income-driven repayment plans, forbearance, or deferment. These “Fresh Start” flexibilities are scheduled to end in December 2023.
If your loans are in collections while you are incarcerated, the government will treat the collections differently depending on how long you will be incarcerated. Not many people know about these programs, but if you are incarcerated, you may be able to get relief from collections on your federal student loans. You will not get relief automatically, you need to apply to receive the relief.
Relief options are listed below:
- If you will be incarcerated for 9 months or less, collections will be paused while you are incarcerated. The government will follow up to restart collections after your anticipated parole or earliest release date.
- If you will be incarcerated for more than 9 months but less than 10 years, the government should stop collections until your earliest possible release date.
- If you will be incarcerated for 10 years or more, the government will write off your defaulted federal student loans. The debt can be reinstated, however, if you decide to make repayment arrangements.
Again, you have to apply for write-off and suspension relief and provide official verification of your incarcerated status.
To apply, you need to send official proof to the government of how long you are expected to be incarcerated in order to stop collections. You must write a letter to the Department of Education completed on the penal institution’s letterhead and signed by a prison official. The letter must include your name, social security number, date of birth, inmate number, and release date or date of eligibility for parole, whichever is sooner. The letter must also include the name, title, and phone number of the official verifying the provided information. This information can also be provided via an e-mail from a prison official. The e-mail must be without adulteration (cannot be edited or changed) and must clearly identify the name of the penal facility and the name and title of the sender.
In all of these cases, you still remain in default. Write-offs are not the same as loan cancellation. When the government writes off a debt, it means that they will stop trying to collect, as they don’t think collection is possible. The debt is still considered due and payable though.
Because there is little public information about the government’s servicing and collection practices for incarcerated borrowers, these policies may have changed. Although the most recent, complete version of the government private collection agency manual is from 2009, NCLC recently obtained through a FOIA request a more recent, redacted version from March 2019.
Apply for One-Time Student Loan Cancellation
Incarcerated borrowers with student loan debt may be eligible for President Biden’s one-time student loan debt cancellation of up to $20,000. Borrowers have to apply for cancellation before December 31, 2023. If you have eligible student loans and meet the income requirements, it doesn’t matter if you are paying on your loans or in default.
Most federal student loans issued before June 30, 2022 are eligible. However, private student loans and commercial FFEL and Perkins loans (loans that are not held by the Department of Education) are not eligible for cancellation. If you made less than $125,000, or $250,000 if you are married filing jointly or a head of household, in either 2020 or 2021, you are eligible.
For more information on cancellation, visit our page here or the Department of Education’s FAQ here. It only takes a few minutes to complete, and you don’t need to log in or upload any documents to apply. Right now, the application is only available online, but a paper application will be available in the future.
Apply for cancellation online at: studentaid.gov/debt-relief/application.