Financial Resources for Formerly Incarcerated Persons

Whether you’re moving to a new state or beginning a new job, starting your life over is exciting but nerve-wracking. This can be especially difficult if you’re re-entering society after being incarcerated for any period of time, and it’s no wonder why—technology and the way we live our day-to-day lives are constantly evolving.

Common challenges after incarceration
Obtaining updated documentation
Paying for a mobile device
Temporary housing
Short-term health and wellness assistance
Food assistance and insecurity
Continuing education after incarceration
Finding a job after incarceration
Credit repair and counseling for the formerly incarcerated
Starting your own business after incarceration

Common challenges after incarceration

People often face the following challenges after leaving prison:

Reconnecting with loved ones
Complying with parole terms and agreements
Overcoming cultural bias and avoiding recidivism
Finding employment
Finding housing
Getting up to date on current events and trends
Maintaining their physical and mental health
Overcoming financial instability

The last point is particularly important—unfortunately, financial instability is common among formerly incarcerated individuals. One study by the Prison Policy Initiative found that formerly incarcerated individuals “are unemployed at a rate of over 27%—higher than the total U.S. unemployment rate during any historical period, including the Great Depression.” 1

Financial stability doesn’t just help you as an individual FIP making your way in the world—it also reduces the likelihood that you’ll commit another crime. This is good for both you and society as a whole.

In the remainder of this article, you’ll find information on how to start off on the right foot financially after leaving prison.

Terminology used in this article

Some of the terms used to refer to formerly incarcerated persons (such as “convicts,” “felons” or “ex-cons”) are controversial and may be perceived as being derogatory or offensive. There are several alternate terms, including “formerly incarcerated persons” and “justice impacted individuals,” none of which have been universally adopted yet.

In the remainder of this article, we’ve opted to use the term “formerly incarcerated persons” (FIPs).

Obtaining updated documentation

When you get out of prison, you’ll probably need to update your personal documentation. The longer you were in prison, the more documents you may need to revise. This will include making relevant updates to your name, address, and/or phone number.

Check the expiration dates on all of your forms of photo ID, such as your passport or driver’s license, because these documents may have expired during your time away.

If you didn’t have a government-issued ID before you went to prison, you’ll need to get one, which costs money. If you haven’t already, check out re-entry programs in your area, such as those offered by the Northwest Regional Re-entry Center (Portland, OR) or The Fortune Society (New York). Programs like these help former inmates get an ID and gather documents to start a new life.

What to bring when you apply for new documentation

When updating your information, ensure you use your current address, contact information, and payment information. Remember that you’ll need specific documents to make these changes, such as the following:

The ID issued to you by the correctional facility
Bank and credit card statements
A recent utility bill, phone bill, or other mail addressed to you in your current home
Car title, insurance card, and registration
Birth certificate, passport, or Social Security card
Pay stubs
Tax returns

Keep your important documents together in a folder so you can easily find them. This will save you time and effort.

Paying for a mobile device

Getting a phone after you’re released is important. Having your own mobile device will give you a sense of freedom and help you acclimate to life outside of prison.

You may have access to the cell phone you had prior to serving your sentence, but upgrading it could be worthwhile, depending on the cost and your personal preferences.

Setting up a cell phone can be a smooth process, depending on the carrier. Some offer pay-as-you-go or pay-by-the-minute plans. These are great for people who don’t have a steady income.

Finding a cell phone carrier

Ideally, you’ll find a cell phone carrier that offers the services you need within your price range.

Here are some tips to help you in your search:

Research coverage maps: Make sure you’ll have the coverage you need with the carrier you choose.
Consider more affordable providers: Look at more than just the top providers (Verizon, AT&T, and T-Mobile)—check out smaller carriers like Boost Mobile or Cricket Wireless.
Understand the contract: Read over the contract (when applicable) and ensure you fully understand the terms before signing.
Ask about payment assistance programs: There are several of these listed below, but make sure to research programs in your state.
Pay close attention to plan cancellation and payment policies: If you’re looking for something that’s less commitment, a no-contract plan is your best bet.

Note that some of the major carriers may run a credit check on you. While your incarceration record won’t affect your ability to get a new phone, having a bad credit score will. This is because carriers may worry that you’re financially unstable and won’t pay your bills on time.

Mobile device payment assistance programs

Don’t beat yourself up if you can’t pay your phone bill. It might take some time to get used to budgeting again. Luckily, there are programs that help people who are having trouble making phone bill payments.

For example, here are just a few phone bill payment programs:

Lifeline: Lifeline is a federal program that provides a discount on phone services to “eligible low-income consumers in every state, territory, commonwealth, and on Tribal lands.” If you qualify, you could pay as little as $9.95 per month for phone service. However, you can only apply the benefits to a landline or a mobile device, not both. Review the eligibility criteria to see if you qualify, and visit the Lifeline National Verifier page to apply.
Universal Service Administrative Co.: This program uses funds collected by telecommunications companies under the Communications Act of 1934 and applies them to costs of telecommunication devices, like cell phones, for low-income individuals.

Beyond being able to pay for a phone, remember that simply knowing how to work one may be a struggle after being incarcerated for long periods of time. Don’t be embarrassed to ask your friends and family for help.

Temporary housing

Finding housing after being released from prison might be tough. If you’re lucky, you’ll be able to return to the same home you lived in before you went to prison. In other cases, you might struggle to find a reliable place to stay.

If you need temporary housing, here are a few options you can consider:

Halfway/transitional housing
Hotels/motels (however, this could get expensive)
Houses of friends, family, or other people who are willing to help
Privately funded housing specifically for the formerly incarcerated
Public alternative housing, such as homeless shelters

The best type of housing for your situation depends on how long you plan to stay. If you only need someplace to stay for the night, a hotel or friend’s house could be a good choice. On the other hand, if you’re trying to find something more long-term, see if you can stay with a family member while you’re house hunting.

Bear in mind that these are temporary housing solutions. Regardless of how long you’re able to stay in temp housing, carefully consider your next steps to find more affordable, permanent housing.

Financial assistance programs for FIPs seeking housing

If you need help paying for permanent housing, check out what housing programs are offered in your area.

The following are a few of the most popular housing assistance programs for the formerly incarcerated:

Catholic Charities Affordable Housing: This is a nationwide program that provides emergency shelter and financial assistance to those in need. They offer a variety of services, from housing and food assistance to mental and physical healthcare.
Local emergency housing options: These include local homeless shelters and other public temporary living alternatives. Each state has its own low-income housing options, so try researching local emergency shelters specific to your area. Be sure to look into the requirements prior to applying.
Section 8 housing: The Section 8 Housing Choice Voucher Program is a federal program that helps low-income families pay for safe and affordable housing. To qualify, your home will need to pass a property inspection to ensure that it meets the Section 8 housing requirements. 2
Temporary Assistance for Needy Families (TANF): TANF is a program that provides funding for families who need emergency financial assistance and other support, such as childcare services, job preparation, and housing.

Take a moment to research each assistance program further to ensure you’re eligible before applying.

Short-term health and wellness assistance

It’s no secret that being incarcerated for a long period of time can take a toll on your mental and physical health.

On one hand, when it comes to the quality of medical care in prison, the Federal Bureau of Prisons reports that “the Bureau’s professional staff provides essential medical, dental, and mental health (psychiatric) services in a manner consistent with accepted community standards for a correctional environment.” 3

On the other hand, that doesn’t mean that you’ll always receive the quality of care you deserve in prison or receive that care in a timely manner (unless the issue is life-threatening). It’s a misconception that prisoners have access to free healthcare. In fact, prisoners too often need to pay a copay to receive medical care. 4

The copay cost varies state by state—for example, the fee is $7 per visit in New York. 5 While this may not sound like a lot to the average person, it is to incarcerated individuals, who earn an average of $0.23 to $1.15 per hour while working in prison. 6

Because of this, it’s common for former inmates to continue to struggle with physical and mental health problems—and in some cases, substance abuse problems—after they’ve left jail.

For example, these are some common medical issues people face after incarceration:

Anxiety
Depression
Diabetes
Emotional distress
High blood pressure
Injury from self-harm
Weight gain/loss

While healthcare can be expensive, it’s crucial for everyone and should be a top priority. Unfortunately, not everyone is able to afford healthcare. In fact, according to a 2021 survey, nearly one in five Americans are unable to pay for necessary healthcare services. 7

Accessing healthcare can be especially difficult for people who are only just starting their new lives after incarceration.

Health insurance for FIPs

Conviction history does not affect your eligibility for health insurance. However, being in prison for any period may affect your ability to afford quality healthcare.

Because you can’t purchase private health insurance through the coverage Marketplace until you’re out of jail, you’ll need to take steps to get coverage as soon as possible once you’re eligible. 8

Here are your main options for health insurance:

Marketplace insurance for ex-inmates: According to Healthcare.gov, “you may qualify for lower costs on monthly premiums and out-of-pocket costs. This will depend on your household size and income during the year you’re seeking coverage.” 8 You have 60 days after your release to qualify for special enrollment.
Medicaid: Medicaid is a government-funded healthcare program that provides health coverage to low-income individuals and families. Depending on your income, you could get a discount on your Marketplace premiums or qualify for full Medicaid health coverage. 9
Medicare: Medicare is affordable health insurance for people 65 or older. However, individuals with a disability, end-stage renal disease, or ALS may be eligible for Medicare coverage sooner than 65.
Basic Health Program (BHP): If you’re earning too much to qualify for Medicaid, then you may be able to sign up for a Basic Health Program. However, these programs are currently only offered in Minnesota and New York
Employee health coverage: Many companies that hire FIPs will offer you health insurance after you’ve worked for them long enough. The Library of Congress offers various online resources that can help you find a job after you leave prison.

What to do if you need urgent treatment or prescriptions

Remember, having health insurance does not guarantee that all of your medical expenses will be covered. Moreover, if you need medical treatment now, then use the Health Resources and Services Administration’s Find a Health Center tool for locating low-cost care providers in your area.

Check out the following resources for help with paying for medications:

PhRMA Medicine Assistance Tool: You’ll be asked to enter the names of the medications you need help accessing as well as personal information. You’ll then be able to see what type of help you can get.
Rx Assist Patient Assistance Program Tool: This is a database of patient assistance programs run by pharmaceutical companies. You’ll also be able to find helpful tools and articles here.
Free Drug Card’s nationwide Prescription Assistance Program (PAP): This is a pharmacy savings coupon card you can use at your local drug store to save on the cost of prescriptions.

What’s more, several telemedicine services are offering free healthcare during the COVID-19 pandemic. Even disregarding the pandemic, it’s worth looking into telemedicine as a low-cost alternative to in-person checkups. It’s also worth researching private health insurance providers to see what you qualify for.

Food assistance and insecurity

Returning home after incarceration will involve making some lifestyle adjustments. You’ll have to create your own eating schedule, go shopping for groceries, and cook your own meals. Depending on your situation, this could be a major challenge.

Food scarcity affects roughly twice as many formerly incarcerated people as people in the general population. 10 This is often because they’re denied access to various government assistance programs, like TANF and the Supplemental Nutrition Assistance Program (SNAP). For example, under the Agricultural Act of 2014 (the Farm Bill), people convicted of committing certain violent or sexual offenses after February 7, 2014 aren’t eligible for food stamps. 11

In addition, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 imposes a lifetime ban on government food assistance for people convicted of drug-related felonies. 12 States are given the option to opt out of or modify the ban, and although most have chosen to do so, some (like North Carolina) delay eligibility for food assistance until 6 months after release from prison. 13

Check what the rules are surrounding your eligibility for SNAP or WIC in your state. If find yourself in need, then try the following alternatives:

Find out whether you’re eligible for the Special Supplemental Nutrition Program for Women, Infants and Children (WIC)
Reach out to religious organizations
Contact the USDA National Hunger Hotline at 1 (866) 348-6479
Seek food assistance through your local food bank
Text your ZIP code to 1 (800) 548-6479 to locate an emergency food provider in your area

It’s important to remember that there’s no need to feel ashamed of your situation. Instead, be proud that you’re taking the necessary steps—such as seeking financial assistance when needed—to change your life for the better.

Continuing education after incarceration

One great way to start fresh after leaving jail is to pick up where you left off with your education. If you never graduated from high school, you can get a general educational development (GED) certificate. If you already have a diploma or GED, consider furthering your education by attending a college or university.

Obtaining a GED

Some prisons offer GED courses, but don’t worry if yours didn’t—there’s still time for you to take one.

Follow these steps to get a GED:

Familiarize yourself with what’s on the test
Take GED practice tests
Create a GED account, log in, and schedule your exam
Study
Take the GED exam

Earning a college degree after incarceration

To earn a college degree, follow these steps:

Find a trade school, college, or university that interests you
Research their admission requirements
Submit your application
Enroll in classes once accepted

However, be prepared for the possibility that the college you want will deny your admission due to your status as a FIP. One study conducted in 2013 revealed that 66.4% of colleges collect criminal justice information during the application review process. 14

Not all hope is lost, though—there is some political movement to enact legislation forcing colleges to remove criminal history questions from their applications.

Higher education is a helpful tool for achieving upward mobility. Although you may already have a great deal of skill and knowledge, college can help you learn more about topics you’re interested in and get the credentials you need to broaden your career prospects.

Financial aid for college tuition and fees

Once you’ve been accepted by a college, you need to think about how you’ll pay for the tuition and associated fees. Start by filling out a FAFSA application. Doing so can help you find funding you qualify for.

In the meantime, educate yourself on the other types of financial aid:

Aid for international study
Aid for military families
AmeriCorps Education Award
Grants (such as Pell Grants)
Private or federal student loans
Personal loans (through a bank or from a family member)
Scholarships
Federal Work-Study

There is a lot to consider when paying for your schooling. If you choose to take out a loan, make sure that you understand your loan agreement, including:

The minimum payments you’ll need to start making after you complete your education
The loan’s interest rate
When your payments will be due.

Finding a job after incarceration

Achieving financial stability is impossible without getting a job. A job will help you get your footing by prompting you to follow a schedule and providing you with some spending money.

Securing a job could take a while since many employers don’t hire FIPs, but developing your professional skills can help you get a leg up with those who are willing to consider your application.

These are important skills you can work on developing to improve your employability:

Ability to handle high-stress situations in a calm manner
Communication skills
Customer service skills
Organizational skills
People skills
Time management skills

Additionally, consider the following tips about finding employment:

Ask for help from a local agency or career counselor who specializes in re-entry services for FIPs
Apply for jobs that you know you qualify for. This means researching the company’s policy on hiring formerly incarcerated individuals
Tell your interviewer about the tax credit they’ll receive if they hire you
Consider getting your record expunged

Employers do have the right to turn you down if you fail a background check, but that doesn’t mean that they always will. This is why it’s crucial to prepare for your interview and find ways to show your prospective employer that you can be a dedicated and trustworthy employee.

It may take some time, but don’t give up—the right opportunity will come along eventually. If you’re not offered a job you applied for, ask the interviewer what you should work on for the next interview. Showing them you’re serious about improving your professional skills may leave them with a positive, lasting impression.

Credit repair and counseling for the formerly incarcerated

Being incarcerated can take a toll on your credit. While committing a crime doesn’t affect your credit (unless it’s a debt-related crime) and credit scores aren’t rigged against people who’ve spent time in jail, serving time can deprive you of opportunities to build credit.

In addition, if you left any bills unpaid, it’s possible that the debt was sent to a debt collection agency. Having a collection account appear on your credit report can cause a major drop in your credit score.

Thankfully, there are many ways to fix your credit. If you haven’t already, check your credit reports with each of the three major credit bureaus (Experian, Equifax, and TransUnion) to find out whether you have any negative items that could be hurting your score. You can get all your credit reports for free at AnnualCreditReport.com.

If you’re credit needs a boost, try these simple tips for improving your credit score:

Take out a credit-builder loan
Lower your credit utilization rate
Consolidate your debts
Pay your bills on time
Keep old credit accounts open, even if you’ve paid off your debts
Avoid opening new lines of credit that you don’t need

It’s important to carefully monitor your credit over time. Check for and dispute errors on your credit report, and take some time to educate yourself on how credit works. Credit is incredibly important, and it will determine your ability to qualify for housing, loans, and more in the future.

Paying off credit card debt

Credit card debt can wrack up fast, especially when your credit card is your primary method of payment. If possible, refrain from using a credit card for large purchases and pay down your balance each month to prevent interest from accruing. Overusing your credit cards also leads to a high debt-to-credit ratio, which will ultimately damage your credit score.

If you’re already struggling to keep on top of your bills, then try these approaches to getting out of credit card debt:

Organize your debts according to size or interest rate (if you have more than one)
Create a payment plan—start by paying off either the debt with the highest annual percentage rate (APR) or the one with the lowest balance
Create a realistic budget that incorporates your credit card bills
Consider a credit card balance transfer
Enroll in credit counseling and/or a debt management plan

Failure to pay your debts will only add to your current financial stress. Reach out for help from professionals or a loved one if you find yourself in over your head. The sooner you recognize that you need financial assistance, the better off you’ll be.

Choosing a credit card

When shopping for a credit card, you’ll want to look at ones that can help you rebuild your credit. Here are a few credit card options that are ideal for people who were formerly incarcerated:

The application requirements will vary depending on the credit card you apply for. Be sure to research each one and ask the company questions before applying.

Starting your own business after incarceration

Starting your own business is a very effective way to show others you’re rebuilding yourself, both personally and professionally. It entails being your own boss, which means you’ll have control over your hiring policies, including whether or not to hire other formerly incarcerated individuals.

With that said, starting your own business requires a lot of time, dedication, and hard work. If you’re at a point in your life where you feel stable enough to try, then begin by coming up with a plan and looking for funding.

Your criminal history may affect your eligibility for a loan, depending on the lender and type of loan you get. Some lenders may view you as a high-risk borrower, whereas others will have no problem giving you a loan as long as you show that you’re able to make the minimum loan payments.

Even if you have bad credit, you may still be eligible for some small business loans. However, you may be stuck with an undesirable payment plan and/or interest rate. Research each loan thoroughly before making a commitment.

Here are a few of the best business loans for people with bad credit:

No matter which route you take toward bettering your life, just know that you’re not alone. Millions of people have been in your shoes and understand the struggles of entering back into the world after incarceration. The resources above can help you face the challenges ahead and make the most of your new beginning.

Financial Recovery Resource Guide for the Formerly Incarcerated

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