Students Increasingly Turning to Crowdfunding to Pay for College
Posted By Eliana Osborn on June 19, 2015 at 3:17 pm
Scholarships you’d hoped for didn’t pan out? Forgot to add in the costs of books and food when planning your college expenses? The world of crowdfunding just might be the way to go to make ends meet when paying for higher education.
Students are increasingly turning to crowdfunding, rather than student loans, to make up the difference between their financial aid packages and the actual cost of college. Some are using specialty sites built just for gathering college money, like ZeroBound. Others are using popular general crowdfunding sites like GoFundMe. Either way the principle is the same: asking anyone from friends and family to strangers to donate money to fund a students’ education.
GoFundMe reported more than $4.6 million raised for education expenses in 2013, and over $13 million in 2014. That money isn’t ending up in just a few pockets, though – the 2014 statistic is for over 100,000 individual campaigns. The number of campaigns specifically mentioning “tuition” rose 4,547% between 2011 and 2014.
Crowdfunding works by expanding your network of potential donors. If a student’s campaign is shared on social media by people they know, their reach is increased exponentially. Even with small donation amounts, so many potential funders can add up to real, significant money. And when a campaign explains unique reasons for needing funds or shares personal stories, even total strangers are often spurred to donate.
Author and education activist Dave Eggers runs a nonprofit foundation called ScholarMatch, which serves as a resource for first generation college students. According to its mission statement, through a variety of programs, “ScholarMatch offers information and mentoring to first-generation and low-income high school students throughout the college application process.”
One major feature of ScholarMatch is a platform for students to crowdfund. Through ScholarMatch, students can create a profile that allows donors to learn more about them. Donors can provide funding and mentoring, both valuable for students navigating the entirely new world of higher education. According to their website, ScholarMatch actually began as a place for crowdfunding, only later adding other resources for college-ready students.
A new app called GoPYT provides a middle ground between free-for-all sites with little or no oversight and narrowly focused programs like ScholarMatch. PYT vets potential applicants and ensures that funds raised can only be used to pay tuition. For donors worried about scams, a system like this provides more assurance that their money will be used as promised.
Today’s students will continue to use the new technology they have at their fingertips to find ways to pay for higher education. And new systems are continually being innovated, providing opportunities for savvy business people to try to harness the tremendous college funding market.