The collateral consequences of ending up on the wrong side of America’s criminal legal system are increasingly recognized as wide-ranging and harmful. Incarceration or even simply a criminal record can limit nearly every aspect of a person’s life even after their sentence ends, interfering with the ability to keep or get a job and support family, secure a place to live, or vote in elections. A little considered, but still ruinous collateral consequence of detention or imprisonment is an incarcerated borrower’s spiral into delinquency and default on their federal student loans.
Incarceration-related default not only hurts the borrower’s credit, making it even more difficult to secure housing, jobs, and transportation after release, but it also increases their debt and puts them at risk of wage garnishment and benefit offset upon release—right at the moment when they may be most financially insecure.