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% of 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. 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.