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Crowdfunding is today's technological answer to community fundraisers. Instead of only asking people in your immediate social circle and network for help, crowdfunding allows you to reach out to complete strangers around the world.

Well-known crowdfunding sites like Kickstarter, Indiegogo and GoFundMe are often used by creatives and entrepreneurs to secure funding for a project. But as the cost of college and the demand for student loans continues to rise, crowdfunding has also become a way young people are getting assistance with education expenses. According to a Pew Research Center study, 22 percent of American adults have donated to a crowdfunding project; in the last few years, more than $100 million has been raised on GoFundMe for education expenses.

How Exactly Does Crowdfunding Operate?

It doesn't take much to get started with a crowdfunding campaign. You create the campaign and share it, and then you try to get attention from your social network or the media. As money comes in, you can cash out your donations via check or bank transfer.

But not every crowdfunding site allows users to ask for education-related expenses. Some sites, like Kickstarter, only accept campaigns for creative projects. However, other sites may allow for all types of fundraising campaigns with no restrictions. You may also be able pocket anything you raise — after paying the platform fees — even if you fail to meet your goal. It's important to remember, however, that there may be tax implications when using a crowdfunding campaign. Ask a tax advisor for more information.

What Makes a Successful Campaign?

Crowdfunding platforms are flooded with campaigns asking for help with paying tuition, buying books, covering a student loan payment or even paying off loans in full. That can make it difficult to stand out. So what makes a complete stranger likely to donate to you? Requiring financial assistance quickly, asking for a seemingly affordable amount of money, a compelling story and a unique photo may just to do the trick.

James Rambo, a 32-year-old illustrator and graphic designer, turned to crowdfunding after his girlfriend suggested it.

Rambo, who graduated from the Art Institute of Washington in 2010 with about $200,000 in student loans, lost his job in November of 2015. After bouncing from one small gig to the next looking for something more long-term, he finally found a graphic design job that would pay enough to cover his monthly bills.

Unfortunately, his paychecks didn't line up when he thought they would during the job transition, so his already tight budget wouldn't cover his bills while he waited for his paycheck to arrive.

"I had to borrow money from my girlfriend consistently to try and catch up," Rambo said, explaining that he never had quite enough. "Every month it just got worse until I realized something had to give."

Rambo created his crowdfunding campaign by asking for $2,000 — just enough to prevent defaulting on his student loans. In addition, he moved the payment due date to the end of the month, which gave him enough time to receive a few work paychecks before owing another bill.

He didn't ask for people to help fund the full $200,000 in student loan debt he owed. Instead, he wrote a long description explaining his situation and why he needed the funds, and he added a fun picture of himself. He took full responsibility for his situation and even mentioned that he would happily trade some original art in exchange for donations.

Five hours later, his campaign had been fully funded.

"I was just about reduced to tears when I got any money and when we hit, and then exceeded, our goal it just blew me away," Rambo said. "It's important to know when you need to reach out to people, to say 'Hey, I need your help with this,' and I think that humbling yourself and knowing to not take advantage of kindness is important."

Rambo even updated his campaign to say that all the money raised over the $2,000 he needed would be donated to a nonprofit. He doesn't plan to crowdfund the remainder of his debt, even though his first campaign turned out to be so successful.

"No, I don't think that's fair. I'm not looking to shirk this responsibility," he said. He felt that as long as he can keep his head above water, it's solely his responsibility. Rambo also sells some of his art online and at local conventions to make extra money to put toward his loans.

Similar to Rambo, Ana Cris Covarrubias Meza, an 18-year-old student at Texas A&M University, turned to crowdfunding in a moment of need — just not for herself.

"My roommate and now best friend texted me one morning a week before the start of our spring semester saying she would not be able to come back because she owed too much money to the university," Meza said.

Her friend, Daniella Tarango, 19, couldn't enroll in classes for the next semester because she owed the university $3,700. Knowing her single mother wouldn't be able to come up with that money in a week, Tarango transferred to a community college in her town.

Meza leapt into action.

"I immediately asked her if it was okay for me to start a crowdfunding campaign," she said. Tarango hesitated initially, but Meza was able to convince her.

When she published the campaign, she thought the two would be lucky to raise $500 out of their $3,500 goal. But in less than a month, the campaign received more than 1,000 social shares and raised $4,454. Tarango was able to re-enroll at Texas A&M and use the remainder to pay off some emergency loans she'd taken out. Like Rambo, the campaign wasn't for a large sum and asked people to react quickly to a deadline.

What Does It Cost?

GoFundMe's fee structure for personal campaigns, which is defined by raising money for yourself or someone else, is 2.9 percent plus $0.30 per donation. Although Rambo's initial goal was $1,800, after doing the math and realizing how much would go to fees, he increased his ask to $2,000.

"In total, $2,265 was raised, and from that I received $2,078.59," he said.

Crowdfunding Isn't a Magic Bullet

Even though crowdfunding worked well for Rambo and Tarango, most people aren't quite so lucky when it comes to using this method to raise money to pay for college costs and student loan debt.

Lonnie McGown, 24, an administrative assistant in Human Resources in Worcester, Massachusetts, and Clint Kuban a 29-year-old veterinarian in Philadelphia, both turned to crowdfunding.

McGown started a crowdfunding campaign after realizing she couldn't afford her expenses. After graduation, she'd spent time teaching English in Japan, but found herself unable cover her student loan payments and bills once her grace period was up. McGown had to move back to the United States and into her parents' house as she struggled to make ends meet. Ultimately, she went on an economic hardship loan deferment for 18 months and then got put on forbearance while figuring out a payment plan.

"It wasn't until my forbearance was at an end, and the $460-plus a month I was being asked to pay was staring me in the face, that I really started to understand I had to ask for help," she said.

McGown graduated from Occidental College in 2014 with just north of $60,000 in debt. She's crowdfunding for $42,300 and has reached just $280 so far.

"I would consider anything over $5,000 a success," McGown said, who works but struggles to keep up with bills and save money. "It would give me enough breathing room financially to squirrel away money, using those donated funds as a buffer, until I could afford to make those payments on my own. It would be almost like training wheels or bowling bumpers until I could support myself alone."

Kuban carries approximately $300,000 in student loan debt between undergraduate school, a three-year Post-Baccalaureate program to prepare for medical school and 4-years at University of Pennsylvania's School of Veterinary Medicine.

"In the spirit of 'it can't hurt to try,' I started my first crowdfunding account aimed at tackling my student loans," said Kuban, who set a $200,000 goal. He also started a website with outdoor adventure and dog training video content, which could generate a little side income as well.

During his time at Veterinary school, Kuban became a cast member of the Animal Planet show "Life at Vet U." Filming had wrapped on the show before he started his campaign, but he saw it as an opportunity to receive donations from fans. Still, he didn't expect it to be a magic fix to his loan burden.

"If it works, then that would be fantastic for obvious reasons," Kuban said. "If it doesn't work, that's also fine. I'll work just as hard as the next veterinarian to pay that down and I can go on without wondering what if?"
As of February 2017, Kuban had raised $275 of his $200,000 goal. But he's not discouraged.

"I already consider it a success — $1 is more than I expected. I've had both family and new friends show their support and I'm endlessly grateful for that."

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