Student debt reached record levels in the last decade -- $1.2 trillion (or $28,950 per student), which outweighs credit card and mortgage debt in the US. Many states have had to raise tuition at public universities to help balance their budgets; the issue has made its way into national politics, too. Givling.com is one company seeking to be part of the solution to this growing problem. By merging the popularity of online trivia games with the success of crowdfunding, Givling is helping students transition to their careers debt-free. What's more, Givling incentivizes generosity among online gamers.
Givling's founder, Libby Pratt, was inspired to try crowdfunding student loan debt when she learned that even declaring bankruptcy isn't an option for student loan debt holders. "I thought this law was patently unfair. Billionaire Donald Trump had declared bankruptcy four times. Why should a billionaire be allowed to declare bankruptcy but it's against the law for a penniless person, with a family, to follow the same rules?" Further, she notes that the difficulty of paying off student loans can have devastating long-term effects: "Even if a loan holder doesn't default, student loans are deliberately set up to be confusing ... If a student doesn't land the exact right salary immediately upon graduation, it's pretty close to impossible to climb out of debt. Their positive potential as a human being is destroyed. They can't buy a house. They can't start a family. They can't pursue the career in which they would truly excel. And to the detriment of their family and community, they're psychologically crippled with massive stress."
The more she thought about crowdfunding student loan debt, Pratt says, the more it made sense. "The student debt financial structure is a huge wrong in our country that needs to be corrected. The solution seemed so straightforward and clear to me ... I thought there must be a way to crowdfund student loans ... "Crowdfunding is nothing new. Venture capital firms are crowdfunders. Banks are crowdfunders ... What is exciting today is that crowdfunding allows everyone in on the game, to fund what they're passionate about, what they believe will better their world. It allows those who aren't in the 1 percent to harness the power that once, only the wealthy had." Thus, Pratt decided to link crowdfunding with something people already enjoy. "There are gaming companies that bring in billions of dollars a year, so a game seemed to be a good source for funds to retire the debts. Givling turns the gaming business model around by creating a hybrid company that is more of a cooperative than a corporation by paying out 90% of the funds brought in by gaming to pay off the debts and incentivize the funders. Trivia is popular. The crowdfunding model empowers liked-minded people to marshal their forces. The combination is a natural, win-win solution. So I set out to do it." Trivia enthusiasts pay 50 cents to be assigned to a team; each day, the highest-scoring team wins a cash award, while most of the funds go directly to the student at the top of the queue. The best part? Students sign up to have their loans paid off with no strings attached, first come, first served.
Pratt's creative solution took determination and personal sacrifice to launch. "Potential investors said it was impossible," she recalls. "One venture capitalist said, 'Why don't their parents just pay off the loans for them?' That shows you the rarefied mindset of Silicon Valley: they didn't understand how a huge percentage of Americans were hurting," One student in Givling's queue exemplifies the individual hardship that can get lost behind the big numbers: after taking out a loan to earn a biology degree in his mid-40s, William was forced by the 2008 recession into a low-paying job. A debt-collection agency took over his loan, and Joe loses 15 percent of his paycheck -- none of which goes towards paying down his debt, which has grown to $150,000 -- to the agency each month. "Givling," Pratt says, "is his only hope to get rid of the debt before he dies." Since large investors were reluctant to do more to address crises like Joe's, Pratt explains, "I bootstrapped it myself ... My husband was a good, but stressed out, sport!"
Another obstacle that Givling had to overcome was public misperception of the problem of student loan debt. Rather than shaming people for "being misled about the total cost of their loans" or believing "that people deserve to be trapped in debt forever if they can't pay it off," Pratt adamantly supports giving people "a chance to wipe the slate clean." And to those who wonder if Givling is too good to be true, she says "the proof is in the pudding, or payouts in our case ... People believe in Givling because we do what we say we will do: we paid off Kevin Foster's $32k student loan in full; players win cash daily; we're about to pay off a $97,000 loan." What's more, Givling addresses student loan debt without burdening taxpayers. Pratt is now proud to say that Givling "is doing what skeptics said was impossible ... We're addressing a seemingly intractable crisis in an entertaining and original way. Our team, together with our growing legions of Givlings who fund the cause, really are improving people's lives by wiping out financial suffering."
Despite the enormity of student loan debt, Pratt envisions Givling becoming a vehicle for the elimination of "financial suffering" by "paying off tens of billions in student loans each year." Givling is working to inspire the political will to make national student loan laws more fair to students. Along with the economic benefits to society of debt reduction or elimination, she knows that removing the burden of student loan debt will prevent graduates from "waking up in the middle of the night in a cold sweat because they don't know how they're going to pay their bills." Thanks to Pratt's creativity and resolve, Givling is proof of the power of technology and everyday people to impact our greatest challenges.