What to do if a borrower is incarcerated

If a borrower is incarcerated it can be very frustrating for those who are attempting to take care of their loans.  This is because without a legal Power of Attorney they typically can’t act on behalf of the borrower due to privacy laws.  There is a way though.

What you do:

First contact the student loan company and inform them the borrower is incarcerated.  Have the following pieces of information:

Name of the borrower

Name and type of prison (example county, state, federal)

His or Her inmate number

What the servicer will do:

Typically what will be sent out to the borrower then is a prison packet that will include useful documents for the borrower in their situation.  These usually include the following:

Third Party Authorization Form (so someone can find out account info)

Income Driven Repayment Application (most inmates will qualify for $0.00 payments)

Student Loan Debt Burden Forbearance Application (good for a year, keeps account current while IDR processes)

Ironically these are the same documents we send if a borrower will be a way for a year or two in the peace corps.  But either way this is a great way to help those who may not be in the best position to help themselves and may cut down on some of the frustration.