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How Financial Education in Jail Can Empower Inmates—and Save Everyone Money

Incarcerated men say that money troubles put them in prison—and avoiding money troubles will keep them out.


Every year, over 700,000 people are released from federal and state prisons to their communities. Within just three years, 40 percent of them are sent right back. Stopping the cycle of incarceration and recidivism is a daunting task, but one key factor may point to a partial solution. Money.

A professor of applied family studies at the University of Illinois, Angela Wiley, conducted a survey of men in two Midwestern jails to find out their level of financial literacy, and what jails could do to help them improve it. She found that the most important subjects that the men wanted to learn more about were “investing, self-employment, budgeting, and saving.” As one inmate told Wiley, “Most of us are in here because of money.” So it’s not a far stretch to say that learning how to make and manage money can help keep them out.

“I would like to know more about ... how I would go about investing money into a retirement—because I don’t have a clue.”

Most men expressed a desire to build their own businesses when they were released from prison; they were much more interested in self-employment than in joining a corporate structure or fighting to survive on minimum wage. But they also knew that self-employment requires a lot of financial knowhow, from book-keeping and budgeting to understanding new tax forms.

“In this population, many have had serious financial stress from an early age,” said Wiley. “Most have very little experience with banks because you have to maintain a certain balance or pay fees to have a checking account. They’re used to cashing paychecks at a local grocery store or utilizing payday loans. That’s how the poorest have been operating.” One man told Wiley in an interview, “I would like to know more about ... how I would go about investing money into a retirement—because I don’t have a clue [laughing]. My investing is stuffed-in-the-coffee-can, buried-in-the-backyard type [stuff].”

Most of the inmates Wiley interviewed spoke dismissively of the programs already being offered in their prisons, if there were any at all. They also generally said that they would be more interested in one-on-one tutoring sessions than large-class lectures. Wiley also stressed the importance of programs that offered actual employment in addition to instruction. “If we’re not helping offenders in ways that will enable them to be successful later on the outside, we’re doing them and society as a whole a disservice,” she said.

So this is what inmates say they want, but will it work? New research suggests that it will. A new RAND report out this month analyzed the effectiveness of educational and vocational programs in prison, and found that they both reduce recidivism and increase people’s rate of employment after their release. Inmates who participate in education programs in jail were 43 percent less likely to return to prison, RAND found, and they were also 13 percent more likely to find employment after their release.

When people fail to make their way in the world after their release, recidivism comes at a huge cost: not only to the inmates themselves, but also, quite literally, to the states supporting them. So RAND’s study also examined the cost-effectiveness of these educational programs, and found promising results. The nitty-gritty numbers:

Focusing on recidivism and using a hypothetical pool of 100 inmates, the direct costs of correctional education programs and of incarceration itself, and a three-year reincarceration rate, we estimate that the direct costs of providing education to inmates range from $140,000 to $174,400 for the 100 inmates (or $1,400 to $1,744 per inmate). The three-year reincarceration costs for those who did not receive correctional education are between $2.94 million and $3.25 million, versus $2.07 million and $2.28 million for those who did. Reincarceration costs are thus $870,000 to $970,000 less for those who receive correctional education.

Put more simply, this study’s findings suggest that “a $1 investment in prison education [will reduce] incarceration costs by $4 to $5 during the first three years post-release.”

Of course, the study points out, this estimate only accounts for the direct costs to the state, and not for the “financial and emotional costs to crime victims and costs to the criminal justice system as a whole,” and therefore, “this is a conservative estimate of the broader effect correctional education could yield.”

The greater cost to society of not educating and rehabilitating inmates prior to their release has yet to be calculated.