Last week American Student Assistance released an 8-minute movie horror movie called THE RED. It’s about debt, and after the film ends, there’s a call to action to face your own debt (“you can’t outrun it, all you can do is face it and fight it”). I spoke with ASA managing director Sue Burton about her organization and what they’re doing to help people confront their student loans.
LS: Tell me about your organization, Sue Burton.
SB: American Student Assistance has been around for 57 years helping borrowers navigate repaying loans. SALT is our program to help students get ahead of their loans. We’ve found the best way to help students manage their loans is to help them when they’re make borrowing decisions, to get them informed and engaged for when they ultimately leave school.
LS: Your movie gave me a knot in my stomach.
SB: The goal is to drive awareness of the power of solutions. So much is written about the problem of student loan debt—but we want students to feel empowered to take action, to look at solutions, to get themselves informed about their options. You can ask people if they have student loans and they’ll say, oh yeah, but you ask much, they have no idea.
Students are disengaged from the details of their loans and how to manage those loans—they’re paralyzed.
Does anyone have a good "I tried to get out of debt but it was hard and took me a long time" story?
Theresa Kuchler is a PhD student in Economics at Stanford University. She looked at anonymized credit card data to try to parse out why people who make enough money to pay off their credit card debt quickly … don’t pay it off quickly. Her finding: PRESENT BIAS. These people are interested in the right now and not the future. One way to tell they exist? People with present bias spend more money in the week after payday. People without present bias don’t.
So uh, which are you???
