Posted November 22, 2013 by

How Students Are Turning to Unconventional Methods to Pay Tuition

Money in a jar for a college fund

Money in a jar for a college fund. Photo courtesy of Shutterstock.

College was once considered a path to financial stability and security. These days, however, with the cost of tuition increasing 500 percent in the last 60 years, paying for college has become a major source of financial stress for many students and their families. Most won’t be able to pay for the cost of living expenses and tuition outright, and will turn to student loans—which can add up to hefty debt. In fact, the average student loan for a four-year institution is $25,000, which can take up to 40 years to pay off and are not eligible for assistance from conventional services that assist with these matters, like most debt relief agencies.

If starting your career off in debt doesn’t appeal to you, you might want to consider alternative means to paying for your higher education. Grants and scholarships are good places to start looking for financial aid. Work-study programs are another popular option, as are ROTC programs. Not interested scrounging for money for education? Try schools that are tuition-free.

However, if you have your heart set on a school that is very far from free, you can try a method of raising money that’s gaining steam amongst college hopefuls. Borrowed from one of the major start-ups, crowdfunding sites specifically designed to help pay for higher education are gaining popularity. While Kickstarter and other, similar sites explicitly state that you can’t use their platform to raise money for college or to pay back student loans, these many new sites have been developed to fill that need.

1. Angeldorm.com. This fundraising website is designed specifically to help college students raise funds for their college experience. If you’re a student seeking financial assistance, all you need to do is create a profile explaining your college plan, major, and other reasons why a donor should support you in particular. Each campaign lasts 45 days, and is free to create (though a fee of $2.75 is taken out of each donation). You can do as many campaigns as you want, and all the money raised goes towards funding your education, regardless of whether or not your goal amount is reached.

And you aren’t required to offer incentives for each donation amount—though it is certainly permitted, and can be an effective way to increase donations. One college junior offered dinners for every person who donated $60 or more—he reached $1300 of his $1000 goal.

2. Lilyslist.com. This fundraising site differs slightly from Angeldorm.com in that it focuses on helping out with existing student loans. Aimed towards friends and family instead of just anyone in your social network, this site gives loved ones (and generous strangers) the opportunity to put money directly in your student loan account. Instead of another hand-knitted sweater for Christmas this year, ask relatives to donate the cost of yarn and time spent knitting into your Lilyslist account instead.

All you need to do is to set up your profile, which is linked to your student loan account. There are no set time limits or deadline, nor do you need to incentivize donations. While creating the profile is free, keep in mind that fees include a $5 service fee and a 4 percent credit card transaction fee.

3. YouCaring. YouCaring is not specifically designed just for college-goers, but has a flexible fundraising platform that allows you to raise money for personal causes and life events, like college tuition (it even has a section specifically for education).

As with Angeldorm, you’ll need to create a profile explaining who you are, why you need the money and why someone should donate to your fund. If you don’t reach your goal, you still get whatever amount of money you did manage to raise. YouCaring campaigns last a little longer, up to 120 days, and there’s no limit on how many campaigns you can do. The difference, however, is that YouCaring is free and without the fees seen in some other crowdfunding sites.

4. Pave.com. If you’re ambitious, a go-getter, and have a clear career path—and can articulate all this to other people, Pave.com might be the right choice for you. Your education and career success becomes an investment for other people with Pave.

Not everyone can join Pave—you must be approved before your profile is put in front of interested investors. Investors will provide a portion or all of the cost of your education, in return for receiving a percentage of your income for the next 10 years, regardless of your salary. The more successful you are in your career, the better the return on investment. Lest you think this leaves you destitute in the decade following college, know that no more than 10 percent is taken out of your salary as payment.

If you plan on going to college, consider all sources of financial aid before relying on student loans. Learning the best ways to be frugal and considering the variety of savings options available to students of all types on sites like DepositAccounts, there’s still hope for aspiring students with limited resources readily available to them.These days, it takes a crowd—instead of a village—to pay for that college degree.

Dave Landry Jr. is an investor and small-business venturist who has taken to blogging to spread awareness about the student loan debt crisis that seems to be only increasing in the US in hopes of finding a solution. He hopes you find this article informative.

Print Friendly, PDF & Email

Posted in Paying for School, Saving for College | Tagged Tagged , , , , , , , , , , , , ,