Student loan debt affects a record high of 37 million Americans, so it is perhaps no surprise that a new program has become available which aims to aid those struggling to make their payments.
The new program, which has been steadily gaining momentum amongst those seeking to pay down their student loan debt and save money, is a private program and operates without government subsidies. The program is SaveUp.com where you get rewarded for savings money not spending it!
Gamification of Debt Repayment
There is a new buzz-word in banking these days and it's called “gamification.” Simply put, the term, ‘gamification,' is the process of applying game theory, not only to win banking customers, but to inspire ingrain a specific behavior from customers. In the case of student loan banking this behavior is having customers put more of their money in the bank while staying current on their student loan payments. Here is the Urban Dictionaries take on Gamification for a good laugh!
Gamification is not about big-ticket give-aways and a free-i-pad-with-purchase of an account: That's just promotional marketing. According to The Financial Brand, true gamification, uses game psychology “to get consumers to do something more and do it better.” In student loan terms, we are talking about saving money and paying down debt.
One new program to help pay down student debt comes in the form of SaveUp.com, the first free nationwide enterprise whose sole purpose of existence is to encourage Americans to save money and pay down their debt(they are also a for profit company).
SaveUp does this by allowing participants to earn reward points for saving money and paying down debt. These reward points in turn allow users to enter contests for up to $2 million in cash, as well as other prizes, thus turning savings and debt pay-down into a game, not only of chance, but of inspiration to keep up the good work – in other words, to keep playing and to become better at the “object” of the “game.”
SaveUp's success was documented in October, when the Filene Research Institute released the results of a six-month pilot study confirming the free Web site's positive role in inspiring savings behavior amongst participants. Furthermore, the study shed light on the fact that credit unions and banks using SaveUp stand to benefit from increased member participation through deposits.
Says Priya Haji, CEO and co-founder of SaveUp in San Francisco, “The driving force behind SaveUp is to help Americans succeed financially.”
And SaveUp, one of the new programs helping to pay down student loans, appears to be doing just that, as key results from the Filene Research study indicated that SaveUp's platform raised the financial awareness of those who participate. The study also found SaveUp's relationship with it's participants also served to improve the relationships between those participants and their financial institutions.
The Filene Research Institute's study of SaveUp also found, with those participants who were part of a credit union:
- More than 50% were motivated by SaveUp to save and pay down their debt
- 64% went to the on line savings program at least once per week
- Just under 50% visited the savings program site 3 or more times per week
- Half of the participants recommended the site to their friends through their credit union.
“If you can create engagement and stickiness…and can get people to see the total money saved aloong with content that's fun, the combined effect is to move people to think about their finances differently,” said Priya Haji.
As CEO and co-founder of one the new programs to help pay down student loans, SaveUp.com, Ms. Haji has an important mission, particularly when so many of us find ourselves deep in student loan debt.
Given that play itself is understood now to be a conduit for learning by capturing participant attention and promoting positive participant engagement, perhaps it is the evolutionary key to our recovery, both in terms of hard numbers and in how we view the world of finance all-around. Perhaps simple play, something once considered frivolous and unnecessary in terms of serious, non-leisurely personal finance matters, could in reality become an indispensable tool for those who are struggling.
What Do You Think?
Will SaveUp.com help people pay down their student loans?