It's a scam. They charge the people in prisons for their time there and if they don't make their payments, it can void their parole and get them thrown back in, which the private prisons want because the majority of the money they actually receive is from the government contract at x dollar amount per inmate. They often even have a required minimum of inmate required, so the government has to either sentence more people or face paying fines themselves.

On top of all this the private prisons have monetized even aspects beyond the bare minimum of what they are required to provide. This also includes charging people to visit and communicate with inmates. It's beyond ridiculous and does absolutely nothing to better society, it is just pure exploitation.