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.
SBPC first asked the Department for documents in a November 2021 FOIA request. It also requested general information about how servicers treat loans of incarcerated borrowers and materials related to student loan debt for borrowers in prison. The group alleges that the Department has been unresponsive and has not produced any documents.
In its report, COLLECTION AT ALL COSTS, Unlocking Cancellation for Incarcerated Borrowers, SBPC evaluated data which provides a follow-up story to its previous report tackling the intersection of mass incarceration and the student loan debt crisis. It found that:
“● More than 90 percent of these borrowers owed less than $20,000 and could therefore see their debt completely wiped out by the President’s cancellation plan.
● Fully 100 percent of the borrowers in this case study were in default on their federal student loans, compared to only about 20 percent of all student loan borrowers before COVID-19.
● Without student loan cancellation, most incarcerated borrowers will be locked out of higher education and the improved post-release outcomes it brings, since PEPs (Prison Education Programs) will be reliant upon federal student aid and will likely turn away Pell Grant-ineligible individuals who are unable to= fund their own educations.”
The SBPC report called for broad reform of the federal government’s approach, including cancellation of federal student loans.
“Given the lack of guidance and support that characterizes the Department’s and its servicers’ relationships with incarcerated borrowers and the myriad communication and financial barriers to these borrowers navigating repayment and relief programs on their own, ongoing and automatic cancellation is the only way for the Administration to fully realize its commitments to decreasing rates of recidivism and relieve the strain of student debt crisis from the shoulders of incarcerated borrowers,” the report said.