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A Lottery for Student Loans?

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Jason: Buy a lottery ticket...have your student loan paid.
Greg Lesko of Lesko financial explains. Greg.

Greg: Thanks Jason. Student loan debt in the U.S.now totals over one trillion dollars and is a burden for many graduates. Now, lawmakers in one state think they have the solution: the lottery.

A New Jersey legislator wants to create a student loan lottery, with the lucky winner getting their loan completely paid off. Student debt is becoming a national problem, so those who support the idea say anything is worth a try.

Jason: How would the lottery work?

Greg: It would be open only to students with loans, so the odds of winning are better than in other lotteries. It would be operated by an outside vendor who gets 25 percent of the take.

The winner gets the entire loan paid off--paid directly to the loan issuer.
if there's money leftover after that, it would go towards a second student's loan, and so on until the pot is exhausted.

Tickets would cost 3 dollars and the total amount one student can buy couldn't exceed 15% of their outstanding loan balance.

Jason: What are the pros and cons?

Greg: On one hand, lotteries are very popular and they do rake in a lot of money. But, those against the idea say it encourages gambling--not exactly a responsible financial behavior.

Also, if a student can afford lottery tickets worth up to 15% of what they owe, why not just put that money toward the loan? It could also encourage students to keep going deeply into debt for college instead of trying to find other ways to pay for an education.