By Contributor,Walter Pavlo

Copyright forbes

Federal restitution was meant to fairly punish those accused of crimes while also benefitting victims. A study shows neither one of these goals are being met.

The Promise of Restitution

When Congress expanded restitution laws in the 1980s and 1990s, lawmakers framed them as a long-overdue step toward justice. Restitution was supposed to stand apart from fines, which flow into government coffers. Instead, it would make crime victims whole by ordering those convicted to repay them directly for their losses. This model had broad appeal: it seemed both morally sound and practically fair.

Yet, more than thirty years later, the promise of restitution rings hollow. In practice, restitution has become an additional layer of punishment—one that neither compensates victims adequately nor gives defendants a realistic path toward financial rehabilitation. Instead of building a bridge between harm and healing, the system leaves both sides frustrated. Victims rarely see meaningful payments, while those convicted face crushing, often lifelong debts. Even presidential commutations do not wipe out restitution, something I recently wrote about.

Cortney E. Lollar, a former Assistant Federal Defender for the Northern District of Georgia and now professor and Faculty Director at Georgia State University Center for Access to Justice. Professor Lollar, in association with the National Association of Criminal Defense Lawyers, published research entitled “Empty Pockets and Broken Promises” which addresses criminal restitution and how it has not met the aspiring goals that were envisioned.

The Scale of the Debt

Federal courts have imposed over $110 billion in restitution debt, with $100 billion of that officially deemed “uncollectible.” The average restitution order exceeds $3.3 million, a figure so high that even middle-class Americans with stable careers would struggle to make a dent in it over a lifetime. For many defendants, especially those with few financial resources, repayment is not just difficult—it is impossible.

Lollar told me in an interview, “Restitution is often an after thought at sentencing where defendants and their counsel focus on the term of a carceral setting and not so much on the amount that is due.” Often, defendants have already lost assets through government seizures at the time of arrest or sentencing. Any ill-gotten gains have been confiscated, leaving little left to pay. Nevertheless, they are ordered to repay staggering sums. Even after twenty years of small monthly payments, victims may see only pennies on the dollar. The system is not designed to succeed in its stated goal of compensation; it is designed to keep the weight of the crime alive indefinitely. Lollar said, “The amounts that are often stated in restitution are so high that even negotiating something down from five-million to two million dollars makes no difference. There is no way to pay it back.”

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Who Really Benefits?

A deeper look at where restitution payments actually go reveals a troubling picture. Nearly 40 percent of federal restitution cases list a government agency—not an individual—as the victim. The Internal Revenue Service is a frequent recipient in tax cases, often collecting not only unpaid taxes but also interest designed to compensate the government for the “time value” of money lost.

Insurance companies also benefit. Courts regularly order defendants to reimburse insurers for claims they paid out, even though absorbing risk is central to the insurance business model. In effect, restitution becomes a subsidy for private corporations that already profit from premiums.

Meanwhile, the government itself profits from the process. By statute, interest accrues on outstanding restitution balances over $2,500, and penalties are added when payments are late or delinquent. According to Lollar, in 2023 alone, the Department of Justice collected more than $6.7 million from such fees, much of which flowed directly into the U.S. Treasury’s general fund. Restitution, originally intended to restore victims, has become a revenue stream for government agencies and a cushion for corporate bottom lines.

The Punitive Character of Restitution

Restitution’s dual mandate—victim compensation and offender accountability—seems balanced in theory. But in practice, accountability has metastasized into punishment. Courts are generally barred from considering a defendant’s ability to pay when setting the amount. Instead, they must impose the “full amount” of a victim’s loss, no matter how unrealistic.

This approach collides with constitutional principles. The Eighth Amendment’s prohibition on excessive fines was designed to prevent financial penalties that strip people of their livelihoods. Yet restitution statutes often demand just that. Judges have no choice but to order payments that push people into permanent poverty, even when they have served their prison time and completed other terms of their sentence.

Those like Kay Rogers, someone I have written about previously, are saddled with millions of dollars in restitution when there was no receipt of any money at all in her alleged crime. “I was ordered to pay restitution for an amount that I never received and there is a dispute as to whether there was even any amount lost that was attributable to me,” Rogers told me in an intervie, ” It’s frustrating, because I completed a 24 month prison sentence and believed that I could move on with life and that is just not the case.”

A Life Sentence in Disguise

For those under restitution orders, debt can feel like a shadow sentence—one that never ends. The government places liens on property, seizes inheritances, garnishes wages and retirement benefits, and monitors every financial move. Ordinary life choices—downsizing a home, drawing Social Security, helping a child with college tuition—become fraught with risk, since the government can step in at any moment to claim funds.

Legally, restitution obligations last twenty years from sentencing or from release from prison, whichever is later. In practice, some courts have extended obligations beyond that limit, sometimes even past a defendant’s death. Plea agreements increasingly include provisions stating that restitution orders will survive the defendant, binding their estates and heirs. What was once imagined as a victim-focused remedy has become, in many cases, a generational burden.

Lollar said that attorneys should focus more on restitution and its implications over the long term. “When it comes to sentencing, there is little focus on life beyond prison and I think attorneys need to look at how the restitution penalty plays into what has become a lifelong struggle for those trying to get back on their feet,” Lollar said.

The Forgotten Victim

Ironically, victims themselves are rarely satisfied with restitution. Because so much of the debt is uncollectible, the majority of victims never receive the full compensation they are promised. Decades can pass with little to no payment. Rather than offering closure, restitution often leaves victims with a second wound: the bitterness of unmet expectations.

Research shows that victims are often more satisfied with smaller, realistic restitution orders that are actually paid than with large, symbolic sums that will never materialize. But the law’s insistence on “full compensation” ensures that expectations are inflated and disappointment is inevitable. In this way, the system fails victims as much as it fails defendants. Lollar said, “When judges hand down these large restitution amounts, the defendant feels this heavy burden and victims believe that they might actually get that amount. That rarely happens, leaving victims even more frustrated.”

Double Compensation and Distorted Justice

Another flaw lies in the possibility of double compensation. Courts sometimes order restitution payments to entities that have already been reimbursed, such as insurance companies. In these cases, the victim receives coverage, the insurer recoups its payout, and the defendant is left with a debt he or she cannot escape.

This arrangement distorts the moral clarity restitution was supposed to provide. Instead of restoring balance, it enriches powerful institutions while undermining both fairness and legitimacy.

Toward Reform

The failures of restitution are not inevitable—they are the product of policy choices, and they can be undone. Reform must begin by restoring judicial discretion. Judges should be able to weigh a defendant’s ability to pay when setting restitution orders, ensuring amounts are realistic and achievable. Smaller, payable sums are more likely to reach victims than astronomical figures that sit uncollected for decades.

Interest and penalty accruals should be eliminated. These charges do not serve victims; they serve only to enrich government coffers and inflate already unpayable debts. Restitution should also be restricted to actual victims, not to government agencies or insurance companies fulfilling routine roles. Finally, restitution obligations must have an expiration date—ten years rather than twenty—so defendants have a chance to rebuild their lives while still being held accountable.

Transparency is also essential. Without reliable data on how much is owed, collected, and distributed, policymakers cannot measure success or identify failure. By tracking this information, lawmakers could redesign restitution into a system that truly restores victims while allowing defendants to move forward.

Conclusion: Empty Pockets, Empty Promises

The story of federal restitution is one of high ideals undermined by harsh realities. Victims remain uncompensated, defendants are shackled with lifelong debt, and the government quietly profits. Restitution was meant to repair harm, but it now functions as a punitive financial trap that leaves nearly everyone worse off.

True justice requires more than symbolism. Unless lawmakers realign restitution with its original purpose—restoring victims without destroying lives—it will continue to deliver little more than empty promises backed by empty pockets.

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