What Are Private Prisons?

What are private prisons?

Two numbers explain the whole topic, and they point in opposite directions. In state and federal prisons, private operators hold a small, steady share. In immigration detention, they hold almost all of it. The growth, the profit, and the political money are all on the immigration side.

How the Per-Diem Model Works

A private prison gets paid by the head, by the day. The contract sets a per-diem rate, a flat amount for every person held for every 24 hours. Fill a bed, bill the government. Empty a bed, stop billing. The arithmetic points one direction: more people, held longer, means more revenue.

That single design choice shapes everything downstream. A company paid per occupied bed has a financial reason to want more arrests, longer stays, and fuller facilities. That incentive is written into the contract itself. No one hides it or disputes it.

The rates are real and specific. At the Adelanto detention center in California, GEO Group is paid about $111 per detainee per day, and ICE guarantees the company a floor of 975 beds whether or not they are full. Across the industry, daily rates run from roughly $50 to over $150 a head depending on the facility and the contract.

Why Taxpayers Pay for Empty Beds

The per-diem model has a twist that protects the company from its own empty beds. Many contracts include an occupancy guarantee, sometimes called a lockup quota or bed guarantee. The government promises to pay for a minimum number of beds even when fewer people are held. If the floor is 90% and the facility is half full, taxpayers still pay for 90%.

In the Public Interest, a research group that studies public contracts, reviewed more than 60 private prison contracts in 2013. Of those, 65% contained an occupancy guarantee, most set between 80% and 100%, with 90% the most common. Critics call the empty-bed payments a “low-crime tax,” because the public pays more precisely when fewer people are locked up.

The waste is measurable. The takeaway sits in one GEO contract a federal watchdog examined.

1. The contract A GEO Group ICE detention facility Guaranteed minimum of 1,170 beds, paid at $76.64 per bed per day ↓ $2.7M billed to ICE every month, full or not
2. The reality Far fewer people held Real usage would cost taxpayers about $961,000 a month ↓ The gap between the guarantee and the use is pure overpayment
3. The outcome About $1.8 million a month for empty beds, at one facility The GAO found guaranteed minimums waste hundreds of millions of dollars a year across the system

Source: GAO 2021 review, via Prison Legal News. One CoreCivic facility in Torrance County, NM was paid for 714 beds while averaging 152 detainees in FY2021.

A guarantee turns a per-diem contract into something closer to a subscription. The company is paid for capacity, not use, which means a drop in detention does not cut the bill the way it should. That is why the next question, who holds the beds and who fills them, is where the money sits.

The Two Companies That Run the Business

Two firms dominate private detention in the United States. GEO Group and CoreCivic together hold most of the country’s for-profit prison and detention capacity, and both earn more from immigration than from anything else right now.

GEO Group is the larger of the two, with $2.41 billion in 2024 revenue. It runs 19 facilities for ICE. After winning new immigration contracts in 2025, GEO reported a record quarterly profit of $254 million. CoreCivic brought in $1.96 billion in 2024 and leases roughly a quarter of ICE’s detention beds to the agency.

Together the two firms took in $4.4 billion in 2024, and immigration detention is now their main growth engine.

GEO Group and CoreCivic 2024 revenue, in billions

Category	Value
GEO Group: $2.41B	$B2.41
CoreCivic: $1.96B	$B1.96

Source: TIME, reporting company 2024 annual revenue. Detention is the growth segment for both.

Neither company’s revenue comes only from incarceration, but detention is where both are growing. Since the start of 2025, GEO reactivated four facilities totaling 6,600 beds and expects them alone to produce more than $240 million a year. CoreCivic announced new or reactivated contracts at six detention centers across California, Texas, Virginia, Kansas, Tennessee, and Oklahoma in the same period.

Why Immigration Detention Is the Real Growth Engine

The 8% figure for state and federal prisons hides where the business has grown. Private operators have held a flat 8% share of the prison population for 20 years. Immigration detention is the opposite, a system where for-profit companies hold almost everyone.

As of January 2025, 86% of people in ICE custody were held in for-profit facilities. An earlier ACLU analysis put the July 2023 figure at 90.8%. By March 2026, of the 20 mega-detention facilities holding more than 1,000 people a day, 19 were run by private companies.

The contrast is the whole point. Reformers spent years pushing private operators out of federal prisons and barely moved the 8%. Immigration detention grew into a nearly all-private system at the same time, with far less attention. That is where the per-diem model, the occupancy guarantees, and the political money concentrate. Private prisons are the supply side of mass incarceration, the business that profits from how many people the system locks up.

The Donations, the Lobbying, and the Revolving Door

The companies do not only collect public money. They spend it on the politics that decides how much detention happens. The 2024 election made the pattern explicit.

CoreCivic and GEO Group, along with their subsidiaries and executives, gave nearly $2.8 million to Trump’s 2024 campaign and inaugural efforts. Each company’s PAC put $500,000 into the inaugural committee alone. Then the people moved with the money.

1. The source Taxpayer per-diem payments Billions paid to GEO Group and CoreCivic for detention beds, full or guaranteed ↓ $2.8M routed to the 2024 Trump campaign and inaugural fund
2. The spend Donations, PACs, and lobbyists GEO and CoreCivic PACs each gave $500,000 to the inaugural committee; Pam Bondi, now Attorney General, was paid $390,000 lobbying for GEO at Ballard Partners ↓ Former officials cross into the companies, and back
3. The revolving door ICE officials become company executives Daniel Bible left ICE days before the 2024 election to become an EVP at GEO; ex-ICE leaders Matthew Albence and Julie Myers Wood also joined GEO ↓ The 2025 budget law delivers the policy
4. The outcome $45 billion for detention, mostly to private contractors A 265% increase to ICE's detention budget, with capacity expanding toward 100,000-plus beds

Sources: CREW; Sludge; American Immigration Council. Donation totals include company PACs, subsidiaries, and named executives.

The door turns both ways. Agency officials leave to run the companies they once oversaw, and company lobbyists move into the offices that write detention policy. Each crossing is legal. Together they describe an industry that helps choose the people who decide how full its facilities will be.

Are Private Prisons Cheaper or Safer?

Private prisons were sold on a simple promise. A company could run a prison for less money than the government and run it just as well. The federal government’s own watchdog tested that promise. It did not hold up.

In 2016, the Justice Department’s Inspector General compared 14 private contract prisons to 14 comparable federal prisons over four years. The contract prisons had more safety and security incidents per capita on most measures. The numbers were not close.

The safety gap is the reason the cost question rarely settles cleanly. Even where a private facility looks cheaper on paper, the comparison breaks down once you account for the populations each system holds and the conditions inside. The watchdog’s finding was direct: contract prisons were less safe, and the savings were not there to justify it.

The Phase-Out That Got Reversed

Federal policy on private prisons has swung back and forth for a decade, and each swing tracks which party holds the White House. The pattern matters because the most recent turn opened the door the industry now runs through. The arc moved through four steps, from the 2016 phase-out to the 2025 expansion.

1. 2016 DOJ moves to phase out private prisons After the Inspector General report, Deputy AG Sally Yates orders the Bureau of Prisons to wind down its private contracts
2. 2017 Sessions reverses the phase-out AG Jeff Sessions rescinds the Yates memo within weeks of taking office
3. 2021 Biden order ends DOJ contracts, but not ICE An executive order ends DOJ and Bureau of Prisons private contracts while explicitly excluding immigration detention
4. 2025 Full reversal and a $45 billion expansion The Biden order is revoked and the budget law funds the largest detention buildout in U.S. history

Federal private-prison policy, 2016 to 2025: 2016 — DOJ moves to phase out private prisons (After the Inspector General report, Deputy AG Sally Yates orders the Bureau of Prisons to wind down its private contracts). 2017 — Sessions reverses the phase-out (AG Jeff Sessions rescinds the Yates memo within weeks of taking office). 2021 — Biden order ends DOJ contracts, but not ICE (An executive order ends DOJ and Bureau of Prisons private contracts while explicitly excluding immigration detention). 2025 — Full reversal and a $45 billion expansion (The Biden order is revoked and the budget law funds the largest detention buildout in U.S. history).

2016: The Yates memo, built on the Inspector General’s findings, told the Bureau of Prisons to reduce and eventually end its reliance on private contract prisons.

2017: Attorney General Jeff Sessions rescinded the memo, and the phase-out stopped before it finished.

2021: A Biden executive order ended Justice Department and Bureau of Prisons private contracts. It said nothing about the Department of Homeland Security, so ICE immigration detention was untouched. Companies kept and grew their immigration business straight through it. That carve-out is the loophole the whole industry now depends on.

2025: The Biden order was revoked outright, and the budget law poured tens of billions into the immigration detention the earlier reforms never reached.

The 2025 Detention Buildout

The current expansion is the largest in the history of immigration detention. ICE held about 39,000 people when the administration took office in January 2025. By November the figure hit a record 66,000, and it climbed past 73,000 soon after, with projections reaching 107,000 or more.

The 2025 budget law supplies the money. It dedicates $45 billion to immigration detention, a 265% increase to ICE’s detention budget, and the bulk of those funds flow to the private contractors that build and run the facilities. By the end of November 2025, ICE was using 104 more detention facilities than at the start of the year, a 91% jump, with documented overcrowding, substandard medical care, and a rising count of abuse complaints.

For more on what this buildout means on the ground, see our coverage of immigration detention and ICE enforcement and how sanctuary cities limit local cooperation. The people filling these private beds are largely the same people the asylum system is supposed to protect.

What Would Actually End It

The private detention system runs on a few specific legal mechanisms, which means it can be unwound by changing them. None of the fixes is hypothetical. Each already exists as a bill, a state law, or a financial decision.

The throughline of the solutions matches the throughline of the business. The profit comes from per-diem pay, guaranteed beds, and a federal loophole, so the remedies target exactly those three. The fight is less about inventing new tools than about using the ones already on the table.

Where the 8% Ends and the 86% Begins

Private prisons are easy to talk about loosely, and the loose version gets the facts wrong. A few distinctions keep the argument precise and the evidence sturdy.

The 8% and the 86% measure different things. Private operators hold about 8% of state and federal prisoners and about 86% of ICE detainees. Those are two separate populations and two separate systems. Blending them into one number is the most common mistake people make about this topic.

Phasing out federal prison contracts did not touch immigration detention. The 2021 Biden order ended Justice Department private contracts but left ICE detention alone. A real victory in one system left the larger, faster-growing system fully intact.

Most people in prison are not in private facilities. The vast majority of incarcerated Americans are held in public state and federal prisons run by the government. Private prisons are a real problem, but they are not where most incarceration happens.

The cost question is genuinely contested. The savings claim has never been cleanly proven, and the 2016 watchdog found private prisons less safe. That does not mean every public facility is well run. The point is that privatization did not deliver the efficiency it promised.

Not every government contractor is part of this. Food service, healthcare, and phone vendors operate inside public prisons too, and they raise their own concerns. Private prisons specifically means a company running the whole facility and getting paid by the head.

Frequently asked questions

Are private prisons cheaper than government prisons? The savings have never been clearly demonstrated. The 2016 Justice Department Inspector General review found private contract prisons were less safe than comparable federal prisons and did not establish reliable cost savings. Companies argue they are cheaper; the federal government’s own audit did not confirm it.

Who owns the private prisons in the United States? Two publicly traded companies dominate the industry: GEO Group and CoreCivic, formerly Corrections Corporation of America. Both are structured as real estate investment trusts and earn most of their growth from immigration detention contracts with ICE.

What is an occupancy guarantee or lockup quota? It is a contract clause requiring the government to pay for a minimum number of beds whether or not they are filled. A 90% guarantee means taxpayers pay for 90% occupancy even if the facility is half empty. A 2013 review found 65% of private prison contracts contained one.

Is private immigration detention legal? Yes. The 2021 executive order that ended federal private prison contracts deliberately excluded immigration detention run by the Department of Homeland Security, leaving ICE free to contract with private companies. That carve-out is why for-profit firms hold 86% of ICE detainees.

What you can do

1. Tell Congress to end federal private-detention contracts. The 2021 order that banned private prisons left an immigration loophole that holds 86% of ICE detainees. Ask your representatives by name to close it by extending the ban to ICE detention. Use the letter below.
2. Push to ban occupancy guarantees in federal contracts. Guaranteed minimums make taxpayers pay for empty beds. Ask your members of Congress to prohibit lockup quotas in any federally funded detention contract.
3. Find out who your state contracts with. California, Illinois, New Jersey, and Washington restrict private immigration detention. Check whether your state does, and press state legislators to pass a detention ban if it does not.
4. Follow the money locally. Look up whether GEO Group or CoreCivic operates a facility in your area and whether your city or county has an agreement that routes ICE detainees through it. Local governments can decline to renew these contracts.