Student Debt Gets the Game-Show Treatment. Who Wins?

TruTV

Madeline Pilone is telling a studio audience why she would love to free herself from $41,222 in student-loan debt. She amassed her debt from studying anthropology at Davidson College. She wants to marry her boyfriend and move the two of them out of a “tiny, little loft apartment” and into a house with a yard.

“That’s the real-life stuff that debt can be holding people back from,” chimes in a game-show host, a charismatic man in a stylish coat who once appeared in an underwear ad. “Let’s take care of it. Let’s do it right now.”

It’s time for the lightning round.

The clock starts ticking down.

“What light, fluffy substance, found underneath the feathers of ducks and geese, is commonly used for jackets and pillows?”

Down, Pilone says. She’s right.

What “mile-high” city legalized the purchase of retail marijuana?

“Minneapolis?”

Zzzzst. It’s Denver.

Five seconds left. “What standardized college-admissions test was originally adapted from an Army IQ Test?”

“SAT.”

Correct, seven of eight so far.

The final buzz interrupts the last question. Pilone doubles over in frustration. But she is quickly beaming and pumping her fists when she realizes she will still take home $24,100, which includes her earlier winnings on the show.

“Never in my wildest dreams did I think a game show was what was going to help me with my debt,” Pilone says later in an interview segment.

Pilone was a contestant on Paid Off, on the cable channel TruTV, much-hyped as apparently the first game show to hand out prize money with the explicit purpose of paying down student debt.

The existence of such a show is either odd or obvious, depending on whom you ask.

Mark Kantrowitz is in the obvious camp. Kantrowitz, an expert on student-loan debt who says he served as a consultant to the show, calls student debt a part of the zeitgeist. Everybody has student-loan debt or knows someone with it. Roughly 44 million Americans have borrowed a cumulative sum of nearly $1.5 trillion to pay for their higher education.

“It’s a natural progression that we would have a game show like this,” he says. Borrowers “hope that something magical will come along and just wipe out their debts. It’s like maybe the government will forgive all student-loan debt. It’s not going to happen, but people wish for it.”

The Payoff

So how do contestants on Paid Off get paid off? By beating out two other people with the same mission. In this episode, they’ll answer questions about their major in the first segment of the show. But they’ll also have to respond to oddball questions about cheap dates or try to match a child’s finger painting to the famous work it’s supposed to represent. (The first one is Leonardo’s “Last Supper.”)

In a later segment, they’ll tackle general trivia and Family Feud-esque questions about college experiences such as “What’s the ideal activity for a first date?”

As the show progresses, contestants are eliminated. The final contestant then has to answer eight question within a minute to clear the debt. All contestants, though, take something home.

“I just want to give you guys money,” says Michael Torpey, the host.

Throughout the show, Torpey plays up the student-loan landscape as in crisis. He introduces the show with an anecdote of how he paid off his wife’s student-loan debt with the underwear commercial. And the end of each episode features a “Super Depressing Fact of the Week.” For example: “According to Forbes — On average, women in college have initial student-loan balances that are 14 percent higher than men’s.”

“But what about the other 45 million Americans with student loans?” asks Torpey, an actor known for his role on the Netflix show Orange Is the New Black. “Sadly, there just aren’t that many underpants commercials.”

Torpey later asks Pilone, Why do people make college so expensive. Her response?

“Because they’re a-holes.”

Cue the laughter, and we’re on to the next contestant.

The first contender to be eliminated in the first episode is Nico, whose education degree from William Peace University left him with $17,350 in debt. He throws his head back in shame when he realizes he was eliminated with a low score of $600. Nico wears half a grin as Torpey rounds up the contestant’s winnings to $1,000. The host then instructs Nico to use the “direct-to-Congress telephone” and tell the legislators what they ought to do differently.

So what should they be doing? Too late: Before we can hear Nico’s thoughts on student-loan reform, we’ve broken for commercials.

Game of Debts

Paid Off is tapping into a popular set of emotions about student loans, but even the people who study them are not sure what’s going on.

Matthew M. Chingos, an author of Game of Loans: The Rhetoric and Reality of Student Debt, says most borrowers once came from middle-class backgrounds, but now more-affluent families borrow.

“To the extent that people from privileged backgrounds drive these conversations,” Chingos says, “student-loan debt now cuts across all classes.”

He also says it’s not obvious why having more money to pay off student loans would be more important than having more money in general to spend elsewhere. And he says it’s common for Americans to hold debt, with no doubts or anger, for cars or homes. Student loans seem to occupy a special place in the debt landscape, he says.

But why the ire? For many young people, Kantrowitz says, a student-loan payment is their first major financial responsibility. They may also feel colleges or lenders foisted the burden on them when they weren’t as financially savvy.

“Nobody loves their lender,” Kantrowitz says. “This is your first opportunity for a big debt that you can hate. And you want to get rid of it. You don’t like being tied down.”

The show taps into that hatred — while sometimes mischaracterizing the nature of student-loan debt. At the beginning of the show, the contestant with the most debt goes first, the presumption being that he or she is the one struggling most with debt.

What’s unclear is how much the contestants have already paid off and how much they’re earning from work. Are their loans private or public? If the latter, are they in the federal government’s income-based repayment program? Those details would establish just how dire a borrower’s need is.

Beth Akers, the other author of Game of Loans, says borrowers with higher debts often have more advanced education, such as law or medical degrees. That typically translates into higher earnings. Instead, it’s usually people who took out loans but didn’t finish a degree who have the most trouble. They have less debt, but they can’t earn the higher pay that comes with a degree.

“We can’t look at debt as necessarily as indicator of financial hardship,” Akers says. “We need to look at the bigger questions to an individual’s finances.”

It’s not that every student should borrow huge amounts either. Akers says if the money is used appropriately, debt can be helpful.

“My concern is if we continue to talk about debt in this very negative way that, you know, we’ll discourage the neediest students,” she says.

And for a show centered on student loans, there’s no guarantee the contestants will even use their winnings to pay off their loans. The show’s producers told The Washington Post that the money is given directly to the winners. There had been talk of paying lenders directly, the producers said, but the logistics and tax concerns became too cumbersome. (The Chronicle requested comment from a spokeswoman for the show, but didn’t hear back in time for publication.)

No wonder: The federal government alone uses 10 companies to service the loans it issues. And that’s not to mention private student loans or servicers.

Pilone, the winner in Episode 1, says in an online clip on the show’s website that she used her winnings to start shopping for a ring, and planned to invest in herself. Will she zap half of her loans with her winnings? It’s up to her to decide.

Chris Quintana is a staff reporter. Follow him on Twitter @cquintanadc or email him at chris.quintana@chronicle.com.