The Department of Education this week assured millions of people with student loans that there's no risk of serving time in prison if they default on those loans, despite a recent news story indicating a jail time might be possible.
"America hasn't had debtors' prisons for nearly two centuries, and you cannot be arrested simply for not paying your student loans," the department's communications director, Matt Lehrich, wrote in a blog post.
Lehrich wrote that when people fall behind on their loan payments, several things can happen, but in no case can a person end up in prison for non-payment.
First, he wrote, the Department of Education's loan servicers will work "for almost a year" to reach out to delinquent borrowers, and will let people know their options if they face a default.
Once a default happens, the department tries to help the borrower on a repayment schedule, and then, "if that doesn't work, [it] tries other methods to collect."
"Only if all other methods are unsuccessful does the Department of Education turn debt over to the Department of Justice for collection through litigation," Lehrich added. "We're required to do that by law."
But even then, the department said, the referral of student loan cases for litigation is "extremely rare." Less than one tenth of one percent of all borrowers are referred.
Lehrich noted that a recent Washington Post story played up the idea that borrowers in default might end up in jail. But he said that story focused on the fact that the borrower refused to show up for a court date related to his default.
"One obvious lesson from this story is that if you're summoned to court, you should appear," it added. "But the bigger picture is this: it's much easier and better to get help with your loans well before it reaches that point."