Total student debt in the U.S is currently in the range of $1.4 trillion, and growing by about $2,726 per second. That’s a staggering average debt per graduate, and a heavy yoke to wear. This national debt crisis is leading to less optimistic graduation speeches and growing cynicism from politicians, educators, and students alike.
Some graduates are now turning to numerous crowdfunding platforms seeking assistance in paying down their student debts. In addition to well-known platforms like GoFundMe, there are student-loan specific platforms that are also known for their debt-easing campaigns.
PigIt, ZeroBound, and SponsorChange, all provide alternatives to traditional crowdfunding platforms. If you’re considering crowdfunding to pay off your student debts, it’s important to understand what the various platforms offer. Note that all the platforms do take a percentage of the money raised, while most also take a larger percentage if the campaign is not successful in reaching its goal.
GoFundMe is a general crowdfunding site founded in 2010. The San Diego-based company’s slogan is “Get money, Get Going.” It’s a surprisingly popular platform for raising funds to cover personal education costs, emergency needs, travel expenses, and more.
Business Insider notes that in 2014, the website hosted almost 107,000 campaigns related to personal education and its total education funding surpassed $13 million.
PigIt is a community-based fundraising platform specifically for education-related causes and U.S. residents. According to their website, anything education-related can be funded, “as long as the end recipient of the funds is a ‘higher education’ institution or your student loan originator.” This means that money can be raised ahead of time for schooling costs, or applied towards accumulated student debt.
Founded in 2012, Piglt takes a five percent cut from successful campaigns and an eight percent chunk from those that fall short of funding goals. However, even if campaigns fall short, the individuals still benefit from whatever money was raised for their debt.
ZeroBound is a crowdfunding platform founded in 2012 and built on a barter-like system. The platform allows individuals to offer their skills and education in exchange for loan payment assistance. Their mission statement vows to connect users “to establish and strengthen communities, and reduce student loan debt, one sponsor, one volunteer and one organization at a time.”
Organizations, non-profits, and individual sponsors then “hire” them to perform volunteer tasks while paying down their loan balances. The platform (and their payment processor, Stripe) do take a cut from all transactions.
In their mission statement, SponsorChange writes: “SponsorChange.org provides non-profits a solution to increase their impact. Non-profits can easily recruit skilled college graduates to complete service projects and raise funds from sponsors to reward their work with student loan payments, helping both non-profits and college graduates reach their full potential.”
Established in 2009, SponsorChange is a pioneer platform in student debt relief. It requires sponsors known as “philanthroteers” to pay down the student debt of volunteers for the successful completion of short-term projects. According to their website, projects need to be completed in three months or less and typically require about 40-50 hours of effort. Projects can net a volunteer anywhere from $200 to over $1000 each. There is no cap on how many projects a volunteer can complete.
While crowdfunding platforms offer collaborative solutions to decreasing and eliminating student debt, in most cases the strength of the campaign and sincerity of the message will significantly contribute to the success of the campaign. It’s just that the campaign should have been taken seriously and considered a business rather than a fundraiser and requires effective business planning for daily execution.
As always, it’s important to create a compelling narrative and employ other important crowdfunding techniques to ensure a greater chance of success.