Crowdfunding for college involves getting small donations from many people to help a student pay for college or repay student loans.
Crowdfunding for College Savings
Asking friends and family for money, even for a worthwhile purpose like a college education, can be a bit awkward and embarrassing. Crowdfunding sites help by acting as an intermediary between the student and the donors, while still permitting a personalized appeal for financial assistance. These sites are similar in concept to wedding registries, but instead of soliciting wedding gifts, they act as a college registry to seek money to pay for college.
These college crowdfunding sites use one of two main business models to fund their operations. Some, like GreenNote, charge the student an annual fee. Others, like GiftofCollege, Piryx and Rally.org, charge a transaction fee on donations. Gradify also appears to be fee-free, other than the transaction fees charged by credit card issuers and Paypal.
There are also crowdfunding sites for more general personal projects, like FundRazr and GoFundMe, that can be used for raising money to help pay for college, as opposed to crowdfunding web sites for entrepreneurial projects, such as KickStarter.
Crowdfunding through Rebate Programs
Some of the college savings loyalty/rebate programs, such as Upromise and the Fidelity Investments 529 College Savings Plan, allow friends and family to set up their own accounts and have the rebates they earn automatically transferred to one or more students of their choosing. Rebates earned through these programs may be contributed to a 529 college savings plan before college or, with some programs, used to repay student loan debt after college.
Crowdfunding to Repay Student Loans
Crowdfunding has also been used to help college graduates repay their student loans. The most well-known example of this is Kelli Space, who graduated from Northeastern University with a Bachelor’s degree in Sociology and $200,000 in student loan debt. She successfully raised about $13,000 in donations to help her repay her student loans. She is launching a service called Zero Bound to help others earn donations to repay student loan debt through community service. It is similar to SponsorChange, a service that began in 2009 to reward volunteer work with loan payments.