The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
Student loan debt has been one of the hotter political topics of the past few years, generating a collection of proposed solutions like free community college, a student borrower’s bill of rights and changes to the bankruptcy law, to name a few. A state lawmaker in New Jersey just tossed out another idea: a debt-payoff lottery.
Of course, anyone with student loan debt could enter their state’s lottery (though not all states have them) for the chance to win and pay off their loans that way, but Assemblyman John Burzichelli proposed a smaller, targeted lottery for people with education debt, reports NJ.com.
His bill describes a lottery in which borrowers can register information about their debt to play, and they can buy tickets online, according to the news report. Someone else can also buy a lottery ticket (no more than $3) to benefit a borrower. Borrowers could not spend more than 15% their loan balances on the lottery tickets — the typical borrower who graduated from a New Jersey school in 2014 had $28,109 in loans, according to the Project on Student Debt, and 15% of that is $4,216. Like any other lottery winners, borrowers would be subject to taxes on their prize. If a borrower wins a pot that exceeds his or her debt, the remaining prize money would go to other borrowers.
While the number of people who could enter a student-loan-payoff lottery is smaller than the potential number of ticket holders in a general lottery, the odds of winning likely wouldn’t be great. Imagine getting to the point where you’ve maxed out your allotment of ticket purchases and realizing you spent thousands of dollars for a chance at paying off your debt, when you could have just paid off thousands of dollars in debt. That would be depressing. Then again, that’s how these things work. With every purchase, there’s always the argument that the money could have been better spent.
Meanwhile, as this bill lingers in the New Jersey Legislature, millions of borrowers across the nation have student loans to pay. Maybe a few of them will win lottery jackpots and use them to pay off their debts, but most people need to figure out a way to afford these things with the financial resources they’ve got. Failing to pay your student loan bills will certainly destroy your credit, and you may have your wages garnished or tax refunds seized, if you default on federal loans. (You can see how your student loans are affecting your credit scores for free on Credit.com.) If you’re concerned about your ability to repay your student loans, talk to your servicer (the company that handles your loan payments) and look into any student loan repayment options that could make your debt manageable.
Image: Ingram Publishing
August 26, 2020
Student Loans
August 4, 2020
Student Loans
July 31, 2020
Student Loans