By Stephen Parsons
Many incarcerated individuals lack basic financial education, increasing their risk of reoffending. According to the Bureau of Justice Statistics (2024), more than 60% of incarcerated individuals have little to no formal financial education, leaving them unprepared for stable employment, housing, and legal obligations upon release. Teaching financial literacy in prisons can disrupt this cycle by equipping them with the tools they need for long-term stability.
Financial struggles are a key factor behind crimes such as theft, drug dealing, and fraud. Many incarcerated individuals lack basic budgeting and debt management skills, making it difficult to achieve financial stability after release. Without these skills, they may turn to illegal activity to survive. Beyond personal financial management, they face court costs, job shortages, and housing challenges, all of which increase the likelihood of reoffending. This often recreates the same economic conditions that led to incarceration in the first place. [1]
Financial strain also takes a toll on mental health and relationships, making reentry even harder. Formerly incarcerated individuals face a 27% unemployment rate — far above the national average — while also carrying financial burdens like court fees and child support. [2]
Connecting money skills to reentry success
Financial instability is directly linked to recidivism. Research shows that those with steady employment after release are 43% less likely to be reincarcerated within three years than those without jobs. [3] Teaching financial literacy inside prisons helps individuals manage money, build credit, and prepare for life on the outside.
Programs like Dave Ramsey’s Financial Peace University and the FDIC’s Money Smart for Adults are already in use in the Ohio Department of Rehabilitation and Correction, teaching budgeting and debt management skills to incarcerated individuals.
A study on Project ReMAKE found that hands-on financial education — through workshops and real-world budgeting simulations — can help individuals build confidence and manage money after release. Teaching incarcerated individuals how to avoid predatory lenders, build credit, and develop savings habits gives them a stronger chance at long-term success. [4]
Barriers to financial education in corrections
Implementing financial literacy programs in prisons isn’t without challenges. Limited funding, a shortage of trained instructors, security restrictions, scheduling conflicts, and a lack of institutional prioritization can hinder access to these programs.
However, some states have found innovative ways to address these barriers. Partnerships with banks, credit unions, and nonprofit organizations have enabled financial literacy instruction at little or no cost. For instance, a pilot program by the Texas Department of Criminal Justice reported a 28% decrease in financial-related parole violations following participation in financial literacy training. [5]
The financial cliff after incarceration
Reentry presents a host of financial obstacles — securing housing, finding employment, and accessing banking services. Without basic financial skills, formerly incarcerated individuals often struggle with essential tasks like opening a bank account, increasing their risk of returning to crime.
Nearly half of formerly incarcerated individuals reported no income during the first year after release. Of those who did find work, only 20% earned more than $15,000. [6] Many also leave prison burdened with court fines and fees — on average, more than $13,000 per person. [7] With poor or no credit histories, limited banking access, and a reliance on predatory financial services, many find themselves trapped in cycles of debt.
Preparing for a digital economy
A lack of financial education only worsens these post-release challenges. Equipping incarcerated individuals with money management skills improves their chances of employment, financial independence, and successful reintegration into society.
In today’s economy, digital literacy is just as important. Most financial and employment-related tasks — from submitting job applications to managing bank accounts—are conducted online. Yet many incarcerated individuals lack experience with digital systems. Integrating financial literacy with digital skills training can reduce recidivism. [8]
Skills like setting up online banking, recognizing financial scams, and using budgeting apps are essential to success after release. Correctional facilities should consider partnering with financial institutions to offer secure, tech-integrated financial education — whether online or offline.
Community benefits of prison-based financial education
Helping incarcerated individuals develop financial literacy benefits more than just the individual. Those who leave prison with the ability to manage money are less likely to rely on public assistance and more likely to contribute to their communities and local economies.
They’re also less likely to return to prison, saving taxpayers money and reducing pressure on the criminal justice system. Research shows that prison-based financial education not only improves reentry outcomes but also fosters broader community stability and resilience.
Making financial literacy standard in reentry planning
Despite the evidence supporting financial education, these programs are still not standard in most correctional institutions. Policymakers can change that by making financial literacy a required component of reentry planning.
Correctional agencies should include financial education in pre-release programs to ensure all individuals — regardless of facility resources — receive essential training. By working with community banks, credit unions, and nonprofit organizations, prisons can deliver these services affordably and sustainably.
Agencies should also consider offering tiered programs — from basic money management to advanced topics like entrepreneurship — so incarcerated individuals can receive instruction appropriate to their goals.
To ensure effectiveness, these programs must be evaluated regularly. Metrics such as post-release employment rates, reductions in financial-related parole violations, and long-term recidivism rates should guide adjustments to curriculum and implementation.
Conclusion
Financial literacy is a powerful tool for reducing recidivism. Without it, many formerly incarcerated individuals struggle to secure employment, housing, and economic independence — pushing them back into the criminal justice system. Teaching money management in prison supports successful reentry, safer communities, and a more sustainable justice system. Correctional agencies and policymakers must treat financial education as a foundational component of rehabilitation.
References
1. Bather JR, McSorley A-MM, Rhodes-Bratton B, et al. Love after lockup: examining the role of marriage, social status, and financial stress among formerly incarcerated individuals. Health Justice. 2024;12(1).
2. Prison Policy Initiative. Mass incarceration: the whole pie 2023. Published 2023.
3. RAND Corporation. Evaluation of prison work and vocational programs. Published 2023.
4. Zhang JJ. A co-creation model of entrepreneurship education to foster prison leaver re-entry into society: a case of Project ReMAKE. Ann Entrep Educ Pedagogy. 2024:122–142.
5. Texas Department of Criminal Justice. Biennial Reentry and Reintegration Services Report. Published 2024.
6. Looney A. 5 facts about prisoners and work, before and after incarceration. Brookings. March 14, 2018.
7. Taylor A. Millions of Americans owe court fees or other “carceral debt.” This must end. The Guardian. November 6, 2021.
8. Gautam A, Gandhi K, Sendejo J. Enhancing reentry support programs through digital literacy integration. In: Designing Interactive Systems Conference 2024. doi:10.1145/3643834.3660730
About the author
Stephen Parsons is a dedicated corrections professional with over a decade of experience in the Ohio Department of Rehabilitation and Corrections. A U.S. Army veteran, he served five years in both active duty and the Ohio Army National Guard before transitioning into public service. Currently a Corrections Specialist, he oversees unit operations, case management, and reentry programs, ensuring compliance with state and federal standards. With a strong background in security, rehabilitation programming and administrative leadership, Stephen is committed to improving correctional practices and public safety.