NJ Assemblyman Proposes Student Loan Lottery To Battle Debt Problem

TRENTON, N.J. (CBSNewYork) -- A New Jersey lawmaker is proposing a lottery to help people pay off their student loans.

Assemblyman John Burzichelli (D-Gloucester) said 70 percent of New Jersey students who graduated in 2013 had some sort of debt -- the fourth highest rate in the nation.

"The burden of debt that graduates are facing is at an all-time high," Burzichelli told 1010 WINS. "Student debt is crushing graduates. It's causing them to change the kind of decisions they make once they graduate. And I'm not suggesting that having this kind of lottery solves all those problems -- it doesn't -- but it would help somem and any help is welcome until this bigger issue is tackled."

Under the bill, a private company would facilitate the lottery and the New Jersey Lottery Commission would conduct the drawings.

Tickets would cost no more than $3 each and be available online.

Winnings would go exclusively to paying off college debt.

"The proceeds do not come to the individual. They go directly to whoever holds the loan, whether it be a lending institution or a university," Burzichelli said. "So the winner never really sees a check, but their student loan gets satisfied."

There is interest in the proposal, but Burzichelli said the details are still being worked out.

"It seems like a novel approach. It seems like if properly conducted that it could help some people," Burzichelli said. "There's certainly a lot of interest in it, and we have a lot of work to do on the details to figure out where it would fit and how it would work, but it's a worthwhile conversation because any opportunity that a person has to pay off their student loan and that heavy debt I think would be welcomed."

Under the legislation, if the winnings exceed the amount of the debt, others would receive the balance.

Twenty percent of the pot would go to the private company running the lottery.