The $200 per month figure is reasonable for covering an inmate's basic needs inside. That amount handles phone calls, commissary essentials like food and hygiene products, and leaves a small buffer for other incidentals. It is a generous but not excessive level of support for someone at a Pennsylvania state facility.
The loan is a serious problem and needs to be addressed directly.
Taking out a loan at 27% annual interest to fund an inmate's commissary account is not sustainable and frankly not necessary. Inmates can get through their sentence without outside financial support. It is harder and less comfortable, but facilities provide the basics including food, clothing, shelter, and basic hygiene items. The commissary money is a quality of life improvement, not a survival requirement.
A 27% interest loan compounds quickly and the financial damage to your neighbor accumulates every month the loan is outstanding. At that rate, $200 monthly deposits cost significantly more in real terms over time, and an elderly person taking on high-interest debt to support a grandchild's prison comfort is a situation that needs to stop.
The most helpful thing you can do for your neighbor is have an honest conversation about the financial reality. The grandson is housed, fed, and cared for by the state. Whatever he receives beyond that is a kindness, not an obligation. If the support continues, it should come only from what your neighbor can genuinely afford from regular income, not from debt that puts her own financial stability at risk.
If she wants to stay connected without the financial strain, InmateAid's letter service is an affordable way to maintain contact for a fraction of what the monthly deposit costs.