As the cost of attending a postsecondary institution rises, crowdfunding an education is becoming more and more common. “What is crowdfunding?” you might ask. Crowdfunding is the practice of raising funds typically by accepting small amounts of money from a large number of people. The most effective way to crowdfund is via the internet, where anything that is publicly posted is accessible to anyone with an internet connection.
But why crowdfund an education? Isn’t it weird to ask complete strangers to invest in your education when they get nothing but good karma in return? For some people, absolutely. It can feel like cheating the system. It’s not merit-based, like a scholarship, and technically it’s not need-based, like aid that students receive from the federal government.
That being said, college tuition continues to rise and the likelihood of earning a full-ride scholarship is slim. Even with federal financial aid such as loans and grants, many students struggle to pay out-of-pocket costs. That’s when crowdfunding tuition starts to look very appealing. It can be an effective way to raise that last $500 needed to pay for books or the $1,000 needed to afford a really special study abroad trip. And it’s convenient. Anyone with access to the internet can create a profile online.
Websites like GoFundMe, Green Note, and Generosity allow you to accept donations from the general public, friends, and family members. The idea is that you share a story about why college is important to you and why you need extra money and solicit donations from people who are reading the website. Viewers can elect to give any amount of money, anonymously or not, to help you reach a set goal. You can publish updates and public thank-you notes on the sites, letting donors know how your education is progressing and what you are going to do with the funds you’ve received.
Of course, there’s a catch. GoFundMe deducts 5% plus a processing fee from each donation that you receive. Green Note charges you an annual membership fee. Generosity charges a 3% plus $0.30 fee on each donation to process the charges. Other sites might actually charge your donors an additional fee during the donation process. These donations are not tax-deductible.
Not only do you need to worry about fees, hidden or otherwise, but the internet is full of dishonest people. If you’re thinking about donating or creating a profile to ask for money, be aware that crowdfunding scams are a real thing. As scams become more common, it is possible that the general public will be less likely to donate to strangers.
Everything is worth a shot. If you are that worried about the cost of your education or paying back your student loans later on, crowdfunding can help alleviate your fears.