Tips for Crowdfunding Your Education Costs
With the average cost of tuition, fees, and room and board at a private, non-profit four-year college topping out at more than $39,000, you’re likely looking for alternative financing to bridge the gap. Crowdfunding, which involves asking a group of people to help fund a project or need, has traditionally been used by artists looking to fund creative projects and by entrepreneurs seeking to raise start-up costs. But recently, students are using this method to help finance education. By the first quarter of 2012, there were a total of 452 crowd funding platforms across the globe that have raised roughly $1.5 billion for various causes, according to crowdsourcing.org, a crowdfunding industry website.
Here are three sites to consider for crowdfunding some of your education costs:
GradSave: This college savings registry, which has more than 4,000 members, allows parents, friends, and family members to donate to your education fund. Account setup and maintenance are both free of charge. However, there are transaction fees for donations, starting at $2.99 and $3.99 for gifts made via eCheck or credit card, respectively. In addition, the site allows members to link their GradSave account to a 529 Savings Plan. Unlinked funds are stored in an FDIC-insured escrow account with Bank of America. Once members sign up for an account, and create a profile, they can post their fundraising effort on Facebook, Twitter, and email. In addition, members can track who’s donating to the account with the site’s tracking feature. Furthermore, donors can also purchase a college savings gift card, which can be used toward any 529 Savings Plan or Prepaid Tuition Plan.
FiPath: Account users set a savings goal using the site’s tuition estimator tool, and then invite others to help meet the goal. Contributions are received via PayPal and can be transferred into one’s college savings account. The site allows contributors to see the total donation amount so they can follow the goal’s progress—and also see if funds have been withdrawn prematurely.
Funding4Learning: Dedicated to funding traditional degrees as well as educational projects, this platform is ideal for those raising money for a certificate program or continuing education class. Funds raised go into a PayPal account. There are two fund-raising options, and each with a different fee structure. The “all-or-nothing” approach–where fund-raisers agree to meet their goal, or forfeit the donated money–has a 5% fee on funds raised if the goal is reached. There are no fees if the goal is not reached. In the direct contribution approach, where fund raisers accept contributions directly as the campaign is in progress—a 5% fee is applied to funds raised, regardless of the outcome.