College seniors walked off the graduation stage with an average student loan debt of more than $26,000 last year. That’s 5% higher than what graduates in 2010 had, and the largest amount of student loan debt to date.
That much debt has consequences, especially in the early years of newly-launched careers. $26,000 in debt works out to $171.58 per month over the course of 20 years with a 5% interest rate. Your average college graduate will need to earn at least $25,738 per year just to make the payments.
College expenses have gotten so high that many parents and students are getting creative. If grants and scholarships won’t work, and there is not enough in the student’s 529 account to even start classes, it’s time to look beyond the usual options. Enter crowdfunding for college.
Options for Crowdfunding College
There are a number of college crowdfunding sites, and more are popping up every day. The one that’s gotten the most press is Upstart.com, which funds college and postgraduate degrees. In exchange for tuition money, you pledge up to 7% of your post-graduation income to your backers over the next ten years.
How much you can raise on Upstart depends on the profile you create and which degree you want. If you’re looking to fund a degree in petroleum engineering you’ll be able to raise much more money than if you try to fund a philosophy degree.
Another crowdfunding site, FiPath, takes a more traditional approach. FiPath sets students up with a 529 account (the same kind of 529 that parents have been using to save for their childrens’ college for over a decade), but they give the 529 a way to be funded online by friends and family.
FiPath and similar sites like GradSave and GiveCollege are referred to as “529 registries”, simply because they’ve taken the existing 529 structure and basically brought it online. Students can use their own social media skills to attract people to fund their 529 fund.
These registries can be helpful because they do not operate with the usual limited time-frame of most crowdfunding pitches. While a typical crowdfunding campaign lasts a month or so, these 529 funds can be set up and slowly grow over months, or even years.
College Crowdfunding Platforms
Other sites look more like traditional crowdfunding platforms. Indiegogo, a well-known crowdfunding platform, has an entire section devoted to getting money for college. Our own Crowdforce platform can be easily set up to create your own personal crowdfunding platform. It can also be structured so you can use it as a platform for students to come and set up their own crowdfunding accounts.
One of the nice benefits to having your own platform is that you don’t have to lose money on fees. Even simple 529 registries like GradSave take $3.99 out of any contribution of $50 or less, and take a full 6% off of any contribution of more than $50. At that rate, you could pay for a monthly Crowdforce license pretty quickly.