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Gaming Student Debt

Let the Game of Loans begin. Millennials’ student debt has reached crippling levels, and new, unorthodox ways of paying off that debt are beginning to emerge.

Crippling. Burden. Problem. These are the kinds of words being used to describe Millennials’ student loan debt, which has reportedly reached record-breaking levels. According to the Wall Street Journal, the class of 2015 faces the largest student loan debt of all time, with a combined total of $68 billion owed for this class alone. Student debt overall is currently at $1.2 trillion, and the average debt per person who has take out student loans is $29,000. According to Ypulse’s research, 55% 18-32-year-olds currently have debt, and of those, 70% have student loan debt. In other words, Millennials are certainly paying a high price for being the most educated generation to date.

The impacts of this student debt on young consumers and the economy overall are huge. Debt-laden Millennials have more than payments to worry about. A recent poll of college graduates has found that those who borrowed more than $25K are not only less likely to enjoy work, they are also less financially and physically fit than their counterparts—providing more (admittedly potentially correlational) evidence that college loans impact students far beyond their college years. Recent graduates who owed more than $50K were also more likely to report feeling their lives lack purpose. Home ownership has fallen to 36.2% for those under 35, and though economists say there is no evidence the debt is causing the decline in home buying, people without student debt are more likely to hold mortgages, a reversal of the pre-recession norm.

With the money owed for education and the problems it’s causing stacking up, there is a new economy of student-debt solution startups. Earnest is a new company that wants to help Millennials deal with their loans and navigate a system that “isn’t built right.” The site helps members to refinance and manage all of their loans to reduce their payments and create a payment schedule in just a few clicks. But others are taking somewhat unexpected approaches to the sobering issue of student debt, giving young consumers the opportunity to game, crowdfund, or win their their way out of the problem. Here are three projects that are asking Millennials to participate, then rewarding them by paying off their student loans: 

GIVLING

A trivia game that rewards player by paying off their student loans? Might sounds crazy, but that’s just what Givling is doing. They’ve combined three things that appeal to Millennials: quiz games, social good, and getting closer to being debt free. Givling is a “pay to play” trivia game that gives prize money to be used towards student loans out to the highest ranking players. But those who pay to play are also doing good, because anyone can also sign up to be added to a Givling list of people who could have their debt paid off without ever playing the game. The site launched this March and has paid a reported $96,858 in student loans so far—recently one Millennial made headlines when Givling paid off his $32, 000 student debt without him ever having played a game. 

SPONSORCHANGE

It’s difficult to work for free when you owe a ton of money, which means that volunteering is probably not a high priority for those who have high levels of student debt. SponsorChange is trying to change that by rewarding the college and graduate school grads who volunteer through their organization with student loan payments. Instead of donating money directly to companies, the startup accepts donations from “Philanteers” that it uses to fund young volunteers struggling with student loans. Those with debt can visit SponsorChange.org to find projects that fit their skills (they are highly educated after all) and those who want to give can sponsor those specific project in order to “fund volunteer…causes [they] care about while helping volunteers chip away at student loan debt.”

Student Loan Lottery

Winning the lottery could one day mean being student-debt free, at least in New Jersey, where a State Assemblyman has sponsored a bill that would make Student Loan Lotteries a reality. The politician, John J. Burzichelli, has said while the lottery does not address the larger problem of student debt, “it could be a novel way to bring some relief.” Winners would be limited to using their winnings to repay their debt, and each ticket would cost no more than $3. While critics are saying that lotteries are ”a scam” and some have reacted less than warmly to the proposal, we would guess that students themselves would be open to the idea of playing anything that could get them debt-free in the scratch of a ticket. 

THE IMPLICATION FOR YOU: Innovative startups are tuning in to the fact what many Millennials want more than anything is to get rid of their student debt. If they’re doing it, why shouldn’t other brands? Think about student loan payoff reward programs, prizes, etc. when creating promotions and marketing.