Can You Go to Jail For Not Paying Student Loans?

Want to know for sure if you can go to jail for not paying your student loans? Answers to that question and more in this guide to what can (and cannot) happen when you don’t pay your student loans.

Main image courtesy of Fox Business.

Once you’ve finished school, it can be a great feeling knowing all that you’ve accomplished. With your diploma in hand, you’re ready to go out into the world and start on your path towards the career of your dreams. Although this is a nice sentiment, and something we all wish would happen upon graduation, unfortunately, it’s not always the truth.

Once you graduate you may have no idea what you want to do, or you just can’t seem to land a job in your chosen field of expertise. As difficult as these situations sound, it’s helpful to know that you’re not alone in that. Many students graduate from school and are unable to find a well-paying job that can support them as well as their new student loan payments. 

After graduation, typically student loan servicers offer a six month grace period before they start collecting on their debt. While this is a nice chance to find a job that allows you to make payments, this is not always the case. So what happens when you find yourself a graduate, but are unable to make student loan payments? Can they actually send you to jail for that?

In this article we’re going to clear all that up and discuss:

  • Can you be sent to jail for not paying your student loans?
  • What exactly happens when you can’t pay your loans?
  • How to avoid going into default with your student loans

Can You Go to Jail for Not Paying Your Student Loans?

Can you really be put into jail if you do not pay your student loans?

jail cell with bed

Don’t worry, you will not end up in jail for not being able to afford your student loans. Image courtesy of KXXV.

If you’ve been struggling to pay your student loans, you’re not alone. There are millions of student borrowers just like yourself who are tied to over $1.75 trillion dollars of student loan debt. While it’s nice to know that you’re not alone when it comes to worrying about how to pay back your loans, it doesn’t make it any easier to make payments. No matter why you’re struggling to pay your debt, the anxiety and frustration caused by it is real, and it can be very damaging to your physical and mental health.  

One of the biggest concerns of borrowers is what exactly can happen to them if they’re unable to make their monthly payments. Can you actually be sent to jail for being unable to pay? Well, we’re here to tell you that thankfully, the answer is no, you cannot go to jail for being unable to pay your student loans. 

The reason you may find yourself worrying whether you’ll be put in prison for not paying back your debt is because you’ve probably read about “debtor’s prisons” before in a Charles Dickens’ novel. These were institutions in the past where people were put who could not pay their debt. If you found yourself in a debtor’s prison, you either had to work towards paying off your debt with labor while in prison, or secure outside funding until you paid your debt. 

Fortunately, these prisons were outlawed in 1833, so you won’t have to worry about the U.S. government putting you in jail for being unable to pay back a debt. After these prisons were no more, the U.S. law changed to recognize debt as a civil matter, and no longer a criminal offense. This means that when you cannot pay on your loans, your loan servicer will have to try and make amends through the civil courts and not the criminal ones--as being unable to pay is not a crime against the state. 

What Happens When You Can’t Pay Your Student Loans?

If you won’t go to jail, what are the consequences of being unable to pay your student loans?

students hanging out on campus

Many recent graduates worry about being unable to pay their student loans. Image courtesy of Barnard College

If you’re like many American borrowers and you simply cannot make the payments on your student loans, at least it’s comforting to know that you will not be put in jail. However, there are consequences for being unable to make payments on your loans. If you ever find yourself in this situation, don’t think that it will just resolve itself, because it won’t. Chances are it will only get worse. 

We recommend as soon as you’re starting to struggle to reach out to your loan providers and start a conversation with them to see what you can do to avoid some of these consequences. 

Report of delinquency

Whether you have federal or private loans, if you cannot pay them, the first consequence is that they will be reported as being delinquent. If you have federally owned loans, this typically does not happen until the loan has not been paid for 90 days. If you’re dealing with privately held loans (loans from a bank, credit union, etc.) loans can go into delinquency status as soon as one missed payment. This will depend on the exact details of your loan agreement.

Once the loan is reported as delinquent, it will also be reported as such to the three major credit reporting bureaus, Experian, Transunion, and Equifax. Once it is reported to these agencies, you can expect to have some major repercussions. The reporting of your delinquent student loans will cause your credit score to take a hit, which can prevent you from securing a mortgage loan, a car loan, opening a credit card, or even renting an apartment. 

Your credit score is something you don’t want to hurt, as it can take years to build up your credit once more. 


If you have still been unable to pay your student loans, once 270 days have passed, your account will be considered in default. Although the credit companies already know that your loans are delinquent, you will now be prevented from being eligible to apply for additional federal student aid in the future. This is important if you’re considering going back to school for a master’s degree or a PhD.

Without the possibility of additional federal aid, if you do decide to return to school and need financial assistance, you will have to do so through privately held loans.


After your loans have entered default, if you have federal loans, the government can then garnish your wages or government benefits. This means that they can take a portion of your paycheck or benefit amount and put it towards a payment on your loan. While there are limits to what they can take, no one wants to have their wages or benefits garnished.

In addition, if you file taxes and receive a refund, they can garnish a portion of that too. 

Court proceedings

If you have privately held loans that have entered default, your lender will most likely start to initiate court proceedings against you. They can also at this time apply to the local civil court to garnish your wages or benefits. Once these proceedings have started, you’ll typically be sent a summons, asking you to appear for a court date. If you choose not to show up for this court hearing, you could be ruled against, even in your absence. 

If you find that your lender is starting court proceedings in order to sue you, it’s best that you respond and open communication with them. Ignoring their notices and requests for appearances will not make anything better. In fact, they can lead to a judge issuing a warrant for your arrest. So, in order to avoid all of that, make sure to contact your lender if you’re at risk of going into delinquency or default.

How to Avoid Going into Default with Your Student Loans

Make steps to actively avoid going into default on your student loans

student studying on campus

Don’t let your missed loan payments get out of hand. Reach out to your loan provider! Image courtesy of Stocksy.

In order to avoid the consequences of being unable to pay on your student loans (delinquency, default, wage garnishment) it’s important that you take active steps to avoid it. If you feel you’re at a risk for being unable to pay, it’s up to you to do something about it.

Reach out to your lender

As soon as you miss a payment, make sure to reach out to your lender. This is true whether you have federal or private loans. If the lender knows your circumstances and you have explained why you are unable to make payments, you may be able to work together to come to an agreement. Collecting part of the money is better than not collecting any money, so many lenders are ready to work with your situation.

Consider other payment plans

If you’re struggling to pay on the typical payment plan, ask to see if there are any plans that are income-driven. If you’re able to go on an income-driven repayment plan, this could lower your monthly payment, but may extend the life of your loan. Depending on your lender and your loan situation, after a certain time period on this plan, you may have your debt forgiven. 


If you have federal loans, consider going into deferment (no interest accumulation on subsidized loans, pause on payments) or forbearance (interest accumulates on all loans, pause on payments). Although deferment requires certain circumstances, such as continuing education, military service, medical residency, if you just need to place your payments on pause, forbearance could be the option you need. 

Student loan rehabilitation 

If you have delinquent loans, but want to rehabilitate your status, consider looking into student loan rehabilitation. Once you meet the criteria for consecutive payments, your account can be moved out of default.

While you won’t go to jail because you can’t pay your loans, you can find yourself in civil court if you are sued by your lender. Consider avoiding this situation at all costs, and make sure to communicate with your lender and work out a situation that will keep you out of default. 

Bridget Houlihan
Bridget is a writer based in Pittsburgh, PA.
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