I have spent the past week wrestling with how to tell this story — and whether or not I should tell this story. It’s certainly related to personal finance, especially my own personal finances. But if I tell it wrong, it comes across as overly political and a plea for money. Awesome! Two things that I’ve attempted to avoid for the entirety of this blog! (Two birds with one stone?)
But I do want to tell this story, because I think it brings up some interesting questions about loans, campaign financing, and even gambling. And because I’m not sure what the best way is to tell it, I’ll do it the only way I know how: starting from the beginning.
As of the last time I checked (at the end of August), I owe $42,526 in student loans to the US government. I’m on the 25 year repayment plan. Due to underemployment and my high loan balance, I’m currently on the graduated repayment plan (my payments get bigger every two years) and I’m paying my loans… but just about nothing else. I can’t afford much else, and I’m draining my savings. None of this is news — it’s just the way it is right now.
Krystal Ball for Congress, 2010
Since moving to Virginia, I’ve made a point to begin investigating local politics. I had done a lot of research on local candidates in New York during the last election, and it felt really good to be that involved. But I didn’t actually find out about Krystal Ball (yes, that’s really her name) through research, I actually first started seeing her in ads on Facebook. That’s a common thing to do, since you can target Facebook ads to certain regions.
Krystal Ball is running for the House of Representatives in Virginia’s First District, which isn’t actually my district, but it certainly is my state. To be honest, I didn’t notice the strangeness of her name until weeks later — at the time, I got very much wrapped up in reading about her and learning about her ideas on the issues. In a lot of ways, Krystal reminds me of myself and we share many of the same views. Personal finance nerds will get a kick of the fact that Krystal is a Certified Public Accountant!
I wrote Krystal an email, telling her that I supported her campaign, despite not being a resident of her district. I made myself a “fan” of her page on Facebook and continued to keep an eye on her over the next couple of weeks. I even sent her a few emails to get her views on campaign finance reform (only to find out, again, that we are very much on the same page about that issue, as well).
The Student Loan Challenge
On Krystal Ball’s website and Facebook page, there were references to something called the “Student Loan Challenge.” Just like I failed to notice that her name was strange, I didn’t pay much attention to this either. (I have a one-track mind when it comes to the issues.) But eventually I did look into it, and became fascinated with the idea. Basically, her campaign is offering to pay off the student loans (up to $50,000) of the person who raises the most money for her by the end of the day on September 30th.
Gambling With an Emergency Fund
As of the last update, the leader in the Student Loan Challenge has raised $1,450 for the campaign. If I dumped all of the money I have in all of my savings accounts into her campaign, I would be the new leader. And if I won, that would pay off between $10,000 and $42,526 of my student loans* (depending on the overall amount raised by the Student Loan Challenge). But that’s a big gamble — I don’t know how many other people are sitting around, waiting until the last day to pump a bunch of money in and get their student loans paid off. (*I’d owe taxes on the prize.)
It’s a gamble that I’m ultimately not willing to take. I adore Krystal Ball as a candidate, but I’m not in a position to give up my emergency fund, my car fund, my charity fund (well, maybe that), my travel fund, etc. etc.. Especially when I’ve barely got my head above water as it is. Yes, if it worked, it would take care of a big problem in my life. But if it didn’t, if someone beat me… I’d have trouble even making next month’s student loan payments. It would ruin me.
So I made a decision, and agreement with myself. If I reach my fundraising goal of $3,000 in donations from other people, by Wednesday afternoon, I’ll kick in $500 myself – if it looks like that will make me win. Because I support Krystal Ball’s campaign a lot — at least $500 worth. So even if that didn’t make me the winner, I wouldn’t feel bad. I’d be responsible for $3,500 in donations to a candidate I truly believe in. And that would be enough for me.
So what do you guys think? Am I making the right choices regarding this whole Student Loan Challenge? Would you give $25 to a political candidate if it might mean the end of student loans for the poorest personal finance blogger? Is this all nuts, or awesome? And who names their kid Krystal Ball, anyway?
Update: the winner of the Student Loan Challenge (who was most certainly not me!) ended up raising $3,500. I ultimately did not contribute any money during the challenge, because I didn’t reach my $3,000 fundraising goal. I plan to donate later on in her campaign. Hindsight is 20-20, of course, but what do you guys think of the whole thing in light of that?
Giorgio Sironi says
Are you sure she will repay the loan? Politics are famous for not fulfill promises… 🙂
Usually politicians wait until they get into office to start breaking promises – a year before the election even takes place would be a really bad time to start! 😉
Jeff @ Sustainablelife blog says
I am glad I now know the name of this girl (I had heard about a 20-something running for congress from VA over the weekend, but didnt look it up right away). I wish her luck (I also wish I could contribute, but cant:(
As for your student loan and if to pay them off, this sounds a bit like a gamble, but i’d look into the rewards seriously. Paying $500 and getting $10000 (or more) is a great return, So I say, If you think you’ve got a shot, go ahead and give her what it takes for you to win (but establish an upper limit if 500 is not it). Even if you lose, the money is still going to help a cause you believe in, so it’s not a total loss.
And as for the “who names a kid krystal ball”? I had a friend named chris cross.
Chris Cross? Wow, yeah, okay, that really is worse. 😉
And I think you’re right – having an upper limit here is really important. I can’t afford to gamble my whole savings away – can anyone? Even if this were just “normal” gambling, I think having an upper limit of how much of your own money you’re willing to contribute is important.
Sallie's Niece says
Hmm that’s an interesting proposition. I’d like to see her pay off my student loans too. But I abhor politicians. Good luck on your quest though.
Wow! That’s an interesting and strong sentiment. Would you be willing to share a little more about what you mean when you say you abhor politicians? (I’m really just genuinely curious!)
Sallie's Niece says
Many years being around them and around campaigns has made me pretty cynical. I’ve given money to candidates and I’ve also seen firsthand how some of that money is spent. And even when people get elected on a strong sense of idealism (rare) when they get into office it’s a whole other story. I could go on. Actually if you’re interested you can email me as all my stories would take up the whole page and I like to stay anonymous on the web.
I was dissapointed to see that its only for Americans. I need my loans paid off 🙁
Financial Samurai says
Wow, what a cool name! What about proposing a bailout for student loans? I got some myself, and don’t want to pay it off b/c it only costs 2.6% in interest!
John DeFlumeri Jr says
It would be difficult to get anyone to use all their savings to put against a student loan. nothing for emergencies? no good.
Hey. I stumbled across your blog from 20sb. You have a nice blog here. I too am now dealing with student loans, although my balance isn’t nearly as high as yours.
I think your strategy is a good one. The risk is worth the reward.
Credit Card Chaser says
Great fundraising idea! I would say go for it – especially if your really believe in her and what she stands for.
Ultimately, it was not meant to be – the winner raised $3,500, which was more money than I had in my coffers! (See the update to the end of the post.)
In all honesty, this sounds a little shady to me. Trading political contributions for the possibility of getting your student loans repaid sounds a bit too much like ‘pork’ for my tastes. (Yes, yes, I know; she hasn’t been elected yet, the money is coming out of her pockets (or the pockets of other donors, I suppose), and she has presumably ensured that everything is on the up and up. Still, it doesn’t set that good of a tone, in my eyes.)
That said, it sounds like you had a pretty good plan there, although deadlines (did the deadline for this pass already? I’m not too clear on that point) and the zeal of other contributors seem to have surpassed your own efforts. Assuming she didn’t have any policy positions I truly hated (iffy sounding contribution motivator aside), I would likely have pitched in a bit, myself. Oh, well, perhaps next time (assuming there IS a next time).
Yes, the student loan challenge ended at the end of September. As I indicated in an update to the post above, the winner ultimately raised $3,500. I’m not sure if they had more zeal than me (hard to say when I have no access to them or their campaign – can’t see their zeal!), but I will say that it’s hugely possible that they’re a better salesperson than me. I’ve never been much of a salesperson, myself. With this campaign, I tried to just honestly spread the word about my enthusiasm over the candidate (included being honest about the student loan challenge, which brought a bit of backlash), since pushy-sales doesn’t really work for me. Apparently, neither does honest enthusiasm.
Another thing that hurt me is I came into it very late in the game – I refused to participate until I had direct confirmation of her views on the things that were most important to me… for better or worse, that gave me less than a week to try and participate in the Student Loan Challenge. (The challenge itself lasted nearly two months.)
have you checked out http://www.sponsorchange.org for help with student loan payments? Really cool microfinance concept. If you loan your skills to nonprofit organizations, you can earn up to $20/hr. off your student loans.
Really cool concept.
Payday for students says
Wow! $42,000 just in student loans…Being a european citized I am amazed how the system in US puts you in chains for 25 years just to give you education. However I admire your plans to get ouf it and I truly hope you will manage to do so in no time.