Can You Go to Jail for Not Paying Student Loans?

Danika McClure  | 

In 2016, CNN reported that a Texas man was arrested by U.S. Marshals for failing to pay his $1,500 student loan payment, which he had owed for nearly 30 years.

“I was unaware of any outstanding debt,” Paul Aker told CNNMoney. “I paid two other student loans and thought I had consolidated everything and paid it all off.”

Aker’s story was shocking for many people, who worried that they too could face jail time for neglecting to pay their student loans. But while Aker did owe money on his student loans, his subsequent arrest was not what costing him prison time. What did cost him, in the long run, was failing to comply with a court mandate.

After failing to pay back his loans for decades, Aker was sued by the federal government for the unpaid remaining amount due on his balance. After failing to appear in court, a default judgement was entered in favor of the U.S. government in 2007. After five years of waiting, Aker had still neglected to pay back his loans. In order to try to collect the remaining balance on his loans, the government asked him to explain why he had not complied with the court order and ordered him to appear at a deposition in 2012. This request specifically noted that if he failed to appear “the Court will have him arrested.”

“The arrest warrant was served on Aker in 2016 but it wasn’t without incident,” Forbes author Kelly Phillips Erb writes. “According to authorities, Aker claimed that he would not cooperate and indicated that he had a gun. The two US Marshals serving the arrest warrant called for backup and eventually Aker was arrested.”

Can You Be Arrested or Go to Jail for Not Paying Student Loans?

Though the story made headlines, the bottom line is no, you won’t be arrested for failing to pay your student loans. What you can be jailed for is failure to obey court orders after avoiding paying for your debts.

“America hasn’t had debtors’ prisons for nearly two centuries, and you cannot be arrested simply for not paying your student loans,” write the experts at the U.S. Department of Education.

What ought to be gleaned, if anything from Aker’s experience is that student loan debts don’t simply go away if you ignore them, and there can be severe consequences should you fail to make your payments on time. As Erb writes later in her piece, “There’s no statute of limitations for federal loans,” which means that the federal government can continue to try to collect the money you owe indefinitely. As such, it’s important that you pay back your student loans.

Federal Student Loans

Luckily, for those who have taken out loans from the federal government, there are a number of repayment options available, including income based repayment, which may reduce the amount you owe per month. If your financial situation is dire, your lender will be able to work with you to determine a good solution that will keep you out of any legal trouble you could encounter.

Private Student Loans

If you’ve taken out private student loans, your lenders may be more likely to be litigious if you’ve continuously missed payments or fail to pay for your outstanding debts. If you’re sued by a private lender, you may also be responsible for the debt, but could also have to pay attorney’s fees and court fines. Though there aren’t as many repayment options for private borrowers, you’re not out of luck if you’re having a hard time paying your loans. Bottom line: get in touch with your lender to see if they offer any additional options such as reduced payments or forbearance.

Regardless of whether you have federal or private student loans, however, you will only be jailed if you fail to comply with court mandates or continuously fail to appear in front of court when summoned.

Student loans don’t go away over time. For those struggling with student loan payments, the best solution is to contact the appropriate loan provider and figure out repayment options that work best for you.

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