Financial Imprisonment: How Financial Literacy & Debt Are Shaping Reentry

Untitled2A new study from the University of Illinois surveyed 155 incarcerated men in two Midwestern prisons and conducted 12 in depth qualitative assessments with select participants to measure their financial knowledge. It found that inmates sought prison programming specific to investing, self-employment, budgeting, and savings because they were seen as viable skills needed to succeed outside of prison. Tasks like managing a checking account, maintaining a balanced budget, building savings are all relatively new skills for a population that has likely had financial stress since childhood. Offering comprehensive financial literacy skills can provide a new way of life for recently released individuals and help reduce recidivism.

“If any other institution in America were as unsuccessful in achieving their ostensible purpose as our prisons are, we would shut them down tomorrow.” ~ James Gilligan, Clinical Professor of Psychiatry at NYU.

Every year upwards of 700,000 inmates are released from federal and state prisons all across the United States with hopes of making a fresh start. Although some will see this future realized about 70% of these inmates will be rearrested and about 52% will be reincarcerated according to the Commission on Safety and Abuse in America’s Prisons. Research from the University of Illinois, in addition to research from the RAND Corporation, shows that rehabilitative programming in prisons, which supports education, training, and skills, can significantly improve the long term success rate for a person affected by the prison system.

Further complicating the issue, an increasing number of people are released from prison with significant debt from their trials and no immediate source of income to pay them. A report from the Brennan Center for Justice shows that some inmates incur as high as $2,464 in court fees upon their exit, which often doesn’t take in to consideration any additional fines, restitution or their ability to pay.

This is a reincarnation of “debtors prisons” as many of these men and women are returning to prison for failing to pay these court ordered fees . Additionally, released inmates are also being denied access to public benefits, receiving reduced credit ratings and garnished incomes to support themselves. These fees create social debt as well with at least four states denying the right to vote until these court fees are repaid. This cycle of prolonged debt begins affecting an inmate’s credit and in turn begins tipping the scales towards their slide back into the prison system. Recent research out of Villanova University finds that without the debt effect of the prison systems the official poverty rate would have dropped by 10% in the US.

UntitledThe United States prison system surpasses all other countries and makes us the most jailed country in the world. The Cook County Department of Corrections, one of the nation’s largest prisons, has an average daily population of between 8,000 and 10,000 inmates. That’s 10,000 people right here in Chicago that, if invested in, would be able to return to their communities and support themselves and their families. Not only would this save the city expenditures on their reincarcertion costs but it would help keep families and communities together.  Until we are able to fully shift away from our antiquated, costly, and harmful prison system we need to continue to advocate for a system of rehabilitation. We need to shift to a system that truly prepares people to rejoin and engage in their communities.

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