According to the BBC, private prison company stocks plummeted on Wall Street following the announcement.
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Corrections Corp. of America and GEO both briefly plunged more than 40 percent in midday trade.
As the federal prison population skyrocketed a decade ago, the Justice Department began contracting with private prisons.
It was not clear on Friday how the Obama administration’s decision to phase out its use of some private prisons will affect five such facilities now operating in Texas as well as the communities where they are located.
The problems at private facilities were hardly a secret, and Yates said Justice Department and Bureau of Prisons officials had been talking for months about discontinuing their use.
Immigration and human-rights advocates have long complained about the conditions in privately run prisons.
Yates said that there are 13 privately run prisons in the Bureau of Prisons system.
Piper Kerman, whose book about her time in prison led to the show, wrote in an essay this summer that private prisons cut corners on staffing and safety measures in order to maximize profits.
The office’s recommendations include an enhancement of the BOP’s oversight checklist and increased assurance that the inmates housed in these private facilities receive proper health and correctional services.
Marshall County Correctional Facility in Holly Springs, managed and operated by Management Training Corporation, is the only private prison in Northeast Mississippi.
The federal government started to rely on private prisons in the late 1990s due to overcrowding.
Currently, about 1.5 million prisoners are housed across the United States in state and federal facilities, and only federal prisoners will be affected by the policy shift.
Deputy Attorney General Sally Yates has instructed officials to either not renew federal contracts with private prison operators once they expire or reduce the scope of the contract.
The federal prison population increased by nearly 800 percent between 1980 and 2013, often at a far faster rate than the Bureau of Prisons could accommodate in their own facilities.
The Heartland Alliance’s National Immigrant Justice Center (NIJC) is one immigrant advocacy group urging the Department of Homeland Security to follow suit and end its use of privately run immigration detention centers.
The report also says the prisons who have contracts with the Federal BOP are operated by 3 private corporations- one being Corrections Corporation of America– which has a facility in Central Georgia.
The American Civil Liberties Union (ACLU) says the decision directly affects Criminal Alien Requirement (CAR) prisons.
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Federal inmates come and go to Crossroads and will continue to do so, despite the Justice Department’s directive earlier this week. The number dropped to about 22,660 inmates, by December 2015.
