The potential consequences of unpaid student loans can be serious, ranging from damaged credit and lawsuits to even arrest. Even though the United States no longer has debtors’ prisons, it is still possible today to be arrested for unpaid debt, including unpaid student loan debt, if you fail to appear in court.
A brief history of debtors’ prisons
The term “debtors’ prisons” refers to a jail or prison specifically operated to hold people who are arrested for failing to pay back debts. The term “peonage” refers to compelling a borrower to work off a debt.
Debtors’ prisons became illegal in the United States in 1833 and peonage was abolished by the Peonage Abolition Act of 1867. The U.S. Supreme Court ruled in Bearden v. Georgia in 1983 that jailing people who cannot repay their debts is unconstitutional, according to The Marshall Project.
Why do arrests for unpaid debt still happen?
If debtors’ prisons are illegal, how can people still be arrested for not repaying debts like student loans? These types of arrests occur because of more than just unpaid debt.
When someone defaults on their student loan, the lender will often turn to debt collectors. Filing a lawsuit against the borrower is one tactic collection agencies use to recoup the debt, according to an American Civil Liberties Union (ACLU) report on the criminalization of private debt. Both private student loan lenders and the federal government can sue for failure to pay student loan debt.
If the borrower is sued and fails to appear in court, the debt collection agency can ask the judge to issue an arrest warrant. The ACLU notes a number of reasons borrowers do not make their court appearances, including lack of notification and health issues. In some cases, notice was served at an incorrect or old address.
Arrests made for unpaid student loan debt
A total of 44 states allow the arrest of debtors for contempt of court, according to the ACLU report. Failing to appear in court after a court summons can result in a warrant and arrest. The warrant and arrest are for a failure to appear in court, not for a failure to repay student loan debt.
Several arrests and arrest warrants related to unpaid student loan debt have made headlines in recent years.
- 2015. The ACLU report highlights the case of Gordon Wheeler. In 2015, U.S. Marshals arrested Wheeler at his home in Texas for failure to appear in court, according to the report. Wheeler did not make an appearance because he was recovering from open heart surgery. The debt in question stemmed from a $2,500 federal student loan taken out in 1983. The unpaid debt had increased to $12,000, according to the report.
- 2016. In 2016, another arrest related to unpaid student loan debt occurred in Texas. U.S. Marshals arrested Paul Aker for failure to appear in court for a case involving outstanding student loan debt, according to CNN Money. The initial federal student loan from 1987 was $1,500 but grew to approximately $5,700 with interest by the time of his arrest. Aker said he was unaware of the outstanding debt, while the U.S. Marshals claimed that several attempts to notify him of the court order were made, according to CNN Money.
- 2018. In 2018, Arielle Gray wrote a first-person account of receiving an arrest warrant in the mail. The civil warrant was issued in an attempt to recoup unpaid student loans from Boston University.
The loan had gone into default more than six years prior to the arrest warrant. But, Gray agreed to a repayment plan after that, according to her account. This reset the statute of limitations, allowing the lender to once again pursue legal action.
How to avoid arrest for unpaid student loans
There are several steps you can take to avoid being arrested and jailed for a failure to repay your student loans.
- Show up in court. If you are sued for a failure to repay your student loans, show up in court, ideally with an attorney. If you don’t show up in court, not only will judgment be rendered against you, but you can be arrested for contempt of court. If you can’t show up in court for health or other reasons, call the court to ask for the court date to be rescheduled.
- Update your address with the lender. Notify the loan servicer whenever you move. You are required to do so by the promissory note. A failure to provide the loan servicer with your current address can cause notices to be sent to an old address.
- Open your mail. The Fair Debt Collection Practices Act (FDCPA) allows you to tell creditors to stop contacting you. This will stop most of the mail and telephone calls. They can still contact you to tell you about specific actions they are taking, such as filing a lawsuit against you.
- Keep loan payment records forever. Keep records of your student loan payments and paid-in-full statements indefinitely. Statutes of limitation do not apply to federal student loans. Paid off and settled debt has a tendency to resurrect itself. It can be difficult to prove that the debt is not owing decades later without documentation.