New Student Loan Promotions Help Borrowers
For student loan borrowers who tuned in to watch the Super Bowl, one advertisement likely stole the show.
During the game, beer brand Natural Light advertised a video contest that will give 25 winners $40,000 each to help repay their student loans.
This promotion giving away a total of $1 million in prize money has received a lot of media coverage -- though it hardly feels unique in 2018.
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With student loan debt at nearly $1.4 trillion, big brands and creative thinkers have noticed. There are an increasing number of interesting competitions and products aimed to help borrowers.
It appears that student loan debt is having a moment. Last month, truTV even announced that it would air a new trivia game show -- "Paid Off With Michael Torpey" -- that would give one winner the chance to have his or her student debt cleared.
The Student Loan Ranger is excited about these developments, since mainstream awareness of student loans and free money can help borrowers. But some of these initiatives come with a word of caution: They aren't a replacement for financial planning and good saving habits.
For instance, the trivia-based app Givling made news in January after 31-year-old Liz Herlihy won $50,000 toward the repayment of her nearly $140,000 student loan balance. According to its website, Givling has given away more than $666,000 to date.
Givling crowdfunds money for borrowers in a funding queue to pay their student loan debt or mortgage, but it must raise $100,000 before doing so each time. The app generates its proceeds from ad revenue and charging users to play more than their allotted two daily free games.
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The Student Loan Ranger recalls a similar funding model with BrowseU, a search engine that also relies on ad revenue to help borrowers with their debt. BrowseU made its first payment to a borrower -- worth $500 -- in 2016. Since then, it has not reported any additional payments. BrowseU did not respond to a request for comment about this product's status.
The long-term viability of these offerings emphasizes an underlying issue with such "free" programs: There is no guarantee you'll receive funds from these promotions. Like playing the lottery, the odds aren't in your favor. Currently, Givling has helped pay off 13 student loans. The Natural Light promotion will reward 25 winners. Combined, that's only a handful of borrowers compared with the reported 44 million with student debt.
That doesn't mean you shouldn't try. For the Natural Light contest, participants ages 21 and older who are U.S. residents can enter by submitting a video about what made their college experience special. The submission must feature a limited edition green tab from a can of Natty Light. But you can use this image for free in lieu of buying anything.
You may still be better off with innovations that attempt to alter savings or payment behavior as opposed to those dependent on luck. One such offering is ChangEd, which gained notoriety in January from its appearance on the television show "Shark Tank" -- and landed a $250,000 investment from businessman Mark Cuban.
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The ChangeEd app rounds purchases up to the nearest dollar, putting spare change toward a borrower's student loans. Its creators claim that more than $100,000 in student loans have been paid off using the service. Users pay $1 a month for the app, but its benefits at least appear more tangible than some companies that also charge to automate aspects of loan management.
Borrowers can find creative ways to reduce their debt for free. But the convenience and the chance of relief, although small, from these new contests and programs can go a long way toward making student debt feel manageable. Hopefully, we'll see more creative thinking continue as the year progresses.
The Student Loan Ranger has no relationship with the promotions and competitions mentioned in this post. If you plan to take part in any of them, or in any student loan-related promotion in the future, we encourage you to understand the rules, terms, conditions and tax implications. It's best to know what you're getting into before you sign up.
Ryan Lane is the senior editor for American Student Assistance, where he oversees content creation for the organization's free education finance support program, Salt. He graduated from Syracuse University with a Bachelor of Science in journalism.
