Dr. Miguel A. Cardona Secretary of Education | Official website
The U.S. Department of Education (Department) has introduced a new avenue for incarcerated borrowers to exit default through loan consolidation, offering them a chance to enhance their credit and access better repayment options. This initiative allows borrowers with student loans prior to their incarceration to consolidate their loans and access income-driven repayment plans like the Saving on a Valuable Education (SAVE) Plan. U.S. Secretary of Education Miguel Cardona emphasized the importance of this step, stating, "Every person deserves the opportunity to become the best version of themselves, but too many individuals who are incarcerated never get that opportunity."
The Department has been actively supporting students and borrowers who are incarcerated, implementing programs like the Prison Education Program (PEP) to facilitate access to education and financial aid. The expansion of federal Pell grants through PEPs is expected to benefit a significant number of incarcerated individuals, with the Department aiming to approve at least 50 PEPs by 2025. Through collaborations with various organizations and agencies, including the U.S. Department of Justice and the Federal Bureau of Prisons, states and territories are prepared to accept applications for PEPs.
In celebration of Second Chance Month, Secretary Cardona visited a Second Chance Pell program in Connecticut to underscore the Department's commitment to providing educational opportunities for incarcerated individuals. He highlighted the significance of increasing access to repayment options for student loan borrowers behind bars, emphasizing the role of education in helping individuals rebuild their lives and reshape their futures.
Borrowers who were in default prior to the new consolidation option are encouraged to explore opportunities like the Fresh Start program, which assists in exiting default and restoring current repayment status. Failure to address default status may lead to severe and lasting financial consequences for borrowers. The Biden-Harris Administration aims to empower incarcerated individuals with a second chance and enhance the affordability of federal student loans for all.
For more information on loan consolidation and repayment options, borrowers can visit StudentAid.gov. Additionally, details about the Fresh Start program and the SAVE Plan can be found on the StudentAid.gov website.
