Do I Need to Pay My Student Loans While I Am in Jail or Prison?

Do I Need to Pay My Student Loans While I Am in Jail or Prison?

Maybe. You are not automatically relieved of your student loan debt if you go to jail or prison. You may, however, qualify for payment plans that reduce your payments — sometimes even to zero — while you are in jail or prison.

How much will I have to pay on my student loans while I’m in jail or prison?

It depends. If you are not in default on your federal student loans, you can adjust your payments. Going to prison usually makes you eligible for an income-driven repayment plan. With these plans, you can qualify for reduced payments. You may even qualify for $0 payments. However, you must not be in default in order to use these plans. If you are in default, you must first resolve this.

How does an income-based repayment plan work?

An income-based repayment plan uses your income to decide how much you will pay each month. First, you will figure out what your discretionary income is. This is the money you can afford to spend each year after you pay for your living expenses. Then, you will divide that number by 12. This is your monthly discretionary budget. You will then calculate 10% or 15% of this amount. In most cases, this will be your monthly payment.

While you are in prison, your income will likely be very low. That means that your monthly payments will also be very low. In most cases, they will be close to zero, if not zero.

Image courtesy of Alexander Mils via Unsplash.

How do I request a payment plan for my student loans?

The easiest way to request a payment plan for your student loans is online.

  1. Go to the Federal Student Aid (FSA) website.
  2. Log in with your Federal Student Aid ID.
  3. Certify your income. This could be $0 depending on where you are. If you report any income, you may need to upload proof of that income to the site.

If you cannot access the FSA website, you can apply by mail.

  1. Get someone to print and send you a copy of the official income-driven payment plan request form.
  2. Collect the address of your loan servicer. If you do not know who your loan servicer is, you can call the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243 to find out.
  3. Complete your form. Attach any documents you need to include.
  4. Mail your form to your loan servicer.

What information do I need to complete my repayment plan application?

There are several items you need to include with your application. It may be difficult to collect your student loan documents and information while you are in jail or prison. So, if you can, try to do it before you enter jail or prison.

  • Your personal details such as your name, address and Social Security number.
  • The name of your loan servicer. Sometimes, you might have more than one. You will need all of them.
  • Whether or not your student loans are in default.
  • The number of dependents in your family.
  • Your income.
  • If you have one, your spouse’s information. You will need all of the same information you need for yourself. Check the above items on the list for reference.
  • Proof of your income. You may only need this if you worked for part of the year before going to prison.
Image courtesy of via Unsplash.

The Takeaway:

You likely will not have to keep paying off your student loans while you are in jail or prison. While you will still owe the money, your payments can be reduced to as little as $0 per month. This is called an income-based repayment plan. You can request one either online or by mail.

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