Podcast: From Likes to Loans — the TikTok Solution to Student Debt

(NEW YORK) – Since President Joe Biden’s student loan cancellation plan was rejected by the U.S. Supreme Court last summer, millions of borrowers have been left uncertain about their financial future. Some have turned to using TikTok as a crowdfunding platform for student debt relief. With the 2024 election approaching and debates over loan forgiveness heating up, many are turning to this unconventional solution.

In this podcast, Click reporters Katie Coss and Alaysia Lane explore this growing trend. They speak with influencer Princess Etch, who pioneered TikTok crowdfunding for student debt, and Betsy Mayotte, president of The Institute of Student Loan Advisors (TISLA), to uncover why TikTok has become a popular choice for financial support.

With nearly half of voters considering loan forgiveness crucial in the 2024 election, according to a March SocialSphere survey, Gen Z and millennials are turning to crowdfunding through TikTok live streams for student debt relief.

Why is it so much easier to get money from an app like TikTok to pay off student loan debt versus the government? Why are people turning to an app like TikTok to pay off their loans? Listen to find out.

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Transcript

<< TIKTOK ARCHIVAL AUDIO>>

Princess Etch: What if I could pay off the remaining balance of my student loan debt using only TikTok roses?

<< MUSIC IN>>

Katie Coss: In 2022, an Etch-A-Sketch artist went viral for paying off $13,000 worth of student loan debt in just 30 days using TikTok roses. A feature on TikTok Live that’s equivalent to half a cent. Two years later, this new take on crowdfunding picked up like wildfire after another woman was able to pay off $7,310 in student loan debt in just six days.

Katie Coss: There are now hundreds of TikTok videos of Americans attempting to pay off not only their student loan debt, but also other debts like medical bills and rent. 

TikTok user ashley xo archival audio: Y’all, have you seen the video of the girl that said she’s gonna go live every single day to pay off her student loan debt? So bitch, I might do that shit too. 

TikTok user tayyyloremadeit archival audio: I pay off my student loan debt with TikTok roses by my 30th birthday.

TikTok user maniacmickey archival audio: Have you guys seen the viral video going around about the girl paying off her debt using roses? Well, I want to give this a try. I want to give this a try. 

Katie Coss: I’m Katie. 

Alaysia Lane: And I’m Alaysia. With nearly half of voters considering loan forgiveness crucial in the 2024 election, according to a Social Sphere survey, Gen Z and Millennials turned to crowdfunding through TikTok live streams for student debt relief.

Alaysia Lane: But the question is, why are people turning to an app like TikTok to pay for their loans?

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Princess Etch: Live streaming was kind of like this hobby of mine. It wasn’t paying my bills, but it was bringing in a couple extra bucks here and there every time I stream. 

Katie Coss: This is Jane, mostly known for her artist persona as Princess Etch.

Katie Coss: She’s a full-time Etch a Sketch artist, whose work can be found on Disney, Netflix, Marvel, and many more. She had the bright idea of using TikTok roses to pay for her student loan debt. 

Princess Etch – TikTok Archival audio: It is day five of the Rose Tally, and I cannot believe that we have already hit a major milestone. Let’s take a look. 

Katie Coss: In just five days, Princess Etch hit her 25 percent mark.

Princess Etch – TikTok Archival audio: As of today, April 11th, at around 3 in the morning, I officially reached the 50 percent threshold. 

Katie Coss: And by day 12, she reached 50 percent of her goal. 

Princess Etch: I really tried to pose it like a challenge and a lot of people reached out and they were like, why don’t you just do GoFundMe? And I said, well, the thing about GoFundMe is that it is a completely valid way to raise funds, but it has a certain connotation to it, which I really like didn’t want my personal mission.

Princess Etch: And the journey was like, I want to put on a show. I want to make our pullout for all of you. And if you feel so inclined, you’re welcome to send tips. And if you send them, this is me being radically transparent about exactly where those tips are going. 

Katie Coss: How have been the comments around this? 

Princess Etch: Freelance artist?

Princess Etch: I’m, you know, contributing to society through paying my taxes through this [00:03:00] endeavor, instead of clocking in and out at a nine-to-five environment. But what was funny is that the comments kind of changed from you’re never going to do this to, you know, you have the audacity to succeed at this. But the time you talk about money, it really ruffles a lot of feathers.

Fox archival audio: Why am I paying their debt? And if people are mad at me saying that, they need to blame Democrats who put all this under their control. 

NBC Bay Area archival video: White House unveiling a new plan to relieve student loan debt for millions of Americans. But will it stand up to legal tests from opponents who already defeated a previous Biden loan forgiveness program? 

<< MUSIC IN>>

Alaysia Lane: Recently, Forbes Advisor reported that the United States faces a collective student loan debt of $1. 75 trillion, averaging $28, 950 per borrower, reflecting a significant financial strain on both individuals and the economy. 

Alaysia Lane: We spoke with Betsy Mayotte, the president and founder of the Institute of Student Loan Advisors, a non-profit that helps student loan borrowers with free advice and dispute resolution. To figure out why this trend isn’t just a trend, but a national crisis.

<< MUSIC OUT>>

Betsy Mayotte: I hear from borrowers all the time who regret their student loan choices and say that they were not given the financial literacy education that would have allowed them to make what in their opinion would have been a smarter choice as to the debt they were taking on, uh, to, attend college. 

 Alaysia Lane: A report by U.S. News Money states 46 percent of borrowers are financially unprepared to restart their federal student loan payments.

Alaysia Lane: This feeling is especially common among borrowers who didn’t finish their degree, with 69 percent of them expressing their unpreparedness for loan repayment. 

Betsy Mayotte: Student loans in and of themselves are not a bad thing. It’s when the return on investment isn’t there for the education where it becomes a negative thing.

 Alaysia Lane: I think the New Yorker came out with an article about President Biden’s proposal for student loan forgiveness. Have you heard of that lately? Do you have any strategies or plans in place to navigate these potential changes? 

Betsy Mayotte: I think the word potential is the keyword here. The proposal that was announced on Monday is in its draft form. 

Alaysia Lane: On April 8th, President Joe Biden announces the administration’s new plan to provide student debt relief that is said to benefit millions. 

KVUE archival audio: By freeing millions of Americans from this crushing debt of student debt, it means they can finally get on with their lives. 

Alaysia Lane: According to CBS, President Biden’s new forgiveness plan aims to address the issues of accrued interest on federal loans.

Alaysia Lane: The plan has the potential to forgive up to 20, 000 of interest for borrowers, but it must first gain federal approval. 

Betsy Mayotte: We’re waiting for the official draft rules to be published, which supposedly according to the federal register schedule is supposed to be this month. 

Alaysia Lane: The Biden-Harris administration’s initial draft rules, which covered interest-related relief in other rules, were published in the Federal Register on April 17th for a 30-day comment period for the public.

Alaysia Lane: The U.S. Department of Education will review the feedback and plans to finalize these rules by fall while also preparing to release a second draft rule to aid borrowers facing hardship in the near future. 

Betsy Mayotte: Considering this is an election year, I think those rules will be challenged in court and that will delay and possibly further change any outcome.

Betsy Mayotte: Anybody who asks me for advice about how to navigate that forgiveness, um, I’m telling them it’s too early to offer advice because we could have a repeat of what happened. Last year, where the Supreme Court ended up striking it down altogether. 

Alaysia Lane: Student loans are just one piece of the puzzle. Betsy Mayotte says it’s crucial for colleges to be held accountable, and for U. S. Congress to address the root cause, the escalating costs of higher education. 

 Betsy Mayotte: Student loans aren’t the problem. Student loans are the symptom of the problem. The problem is the cost of higher education. I think the Biden administration and other administrations have done to try to ease the burden of student debt are great, but it’s not addressing the problem.

 Betsy Mayotte: It’s time for colleges to have some skin in the game. If the return on investment isn’t there, for your students that are graduating with the credentials from your institution and they can’t afford their student debt. It shouldn’t be the U.S. taxpayer that takes that extra burden on. It should be the institution that received the funds.

 Betsy Mayotte: And right now the schools have virtually no skin in the game. One of the biggest reasons that the cost of higher education has increased so significantly in the past couple of decades is the states have deinvested in higher ed. Until Congress addresses the cost of higher education, the student loan debt crisis will continue to be a crisis.

<< MUSIC IN>>

Alaysia Lane: Princess Etch’s journey embodies the aspirations and struggles shared by thousands of Americans striving to navigate their financial loans. 

Alaysia Lane: Her innovative use of platforms like TikTok to chip away at student loans and pursue financial independence speaks to the resilience and creativity within our society.

Katie Coss: Now, until May 17, the public has the opportunity to comment on the revised program that could begin reducing and eliminating borrowers’ balances. To learn more and submit your formal comment, visit federalregister.gov. 

Princess Etch: When I saw the trend picking up again, I realized this is a fantastic opportunity to like, open the conversation again.

Princess Etch: And we have the choice and the opportunity to open these doors and find unique paths to financial freedom because the current system is not cutting it for most of us.

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