Crowdfunding Your Student Loan Debt

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Updated on Wednesday, June 3, 2015

Students throwing graduation hats

While the standard repayment plan for federal student loans puts borrowers on a 10-year timeline to pay off their debt, research shows a far more drawn out repayment reality – with the average bachelor’s degree holder needing 21 years to pay off his or her loans.

Meanwhile, actor/director Zach Braff, who raked in enough per episode of the hit series “Scrubs” to cover the entire cost of tuition at a four-year private college, raised two million dollars in a mere 48 hours for his passion project, “Wish I Was Here” using Kickstarter, a crowdfunding platform.

College grads struggling to pay their way out of debt, deferring their own passion projects just to keep up with payments, are now turning to similar platforms. With the rate of student loan delinquencies rising to 11.3 percent in the final quarter of 2014, the number of borrowers rising 92 percent in the last ten years, and the average student loan balance up 74 percent, relief, in whatever form it takes, is welcome.

While policy makers argue over the sustainability of the current model of higher education, graduates are taking matters into their own hands, implementing new strategies to avoid default and the negative consequences that follow.

Understanding Crowdfunding

Crowdfunding is the practice of financing a project or cause through contributions, often small, from a large number of people. Typically, funds are raised through online platforms, giving individuals the opportunity to reach a wide audience and connect with those beyond their immediate network. While crowdfunding initially gained popularity funding entrepreneurial and artistic endeavors, offshoots have come to specialize in backing everything from charitable causes to personal goals to education.

Crowdfunding platforms specific to student loan debt are still fairly new, but the practice of asking for outside assistance in reducing personal education costs is on the rise. GoFundMe, a crowdfunding site that allows individuals to fundraise for various personal causes, reports the number of campaigns specifically mentioning “tuition”, rising 4,547 percent from 2011 to 2014.

It should be noted however, that not all crowdfunding platforms operate using the same model. Just like choosing an investment platform or a bank account, it’s important to fully understand the fine print before signing up.

Popular Crowdfunding Platforms for Student Loan Debt


GoFundMe, founded in 2010, is a general crowdfunding site, but immensely popular in funding personal education costs. The site reports that in 2014, it hosted almost 107,000 education-related campaigns grossing more than $13 million.

Fees: GoFundMe charges a fee of 7.9 percent and 0.30 per donation.

Successfully Crowdfunding Student Loan Debt

After choosing a platform and launching a campaign, grads should be prepared to follow up with marketing and outreach efforts to build interest and circulate their campaign page beyond their immediate circles of friends and family.

Only 44 percent of all campaigns created through Kickstarter, one of the top crowdfunding sites, get fully funded. To enjoy the benefit of a successful campaign, grads can implement the following strategies.

Develop a Platform

Create an online presence beyond your campaign page. A blog, videos or hashtag associated with your fundraising efforts can draw increased interest, engaging the community and increasing your chances of getting funded.

Set a Realistic Goal

It might seem counterintuitive, but if you’re goal seems too far out of reach, people may be less inclined to contribute. Having a strong support group of core donors ready to give in the first week of the campaign can illustrate early success, breeding subsequent success.

Follow Up

Consistency is key. Track progress of the campaign and share updates often. The more reason you give people to return to your page, the more chances you get to have them contribute while they’re there.

Create a Sense of Urgency

Too long a timeline will give people an excuse to hold off on contributing, which too often results in not contributing at all. Limit your campaign to four to six weeks.

Crowdfunding for Good

Whatever your opinions on crowdfunding, it is an attractive alternative to twenty years of interest bearing student loan payments. Not only does crowdfunding student loan debt give grads the opportunity to start their careers in a better place, it gives community members a chance to give back to the causes and individuals they believe in too.

Not everyone may be on board with crowdfunding just yet, but using generosity and community support to help grads escape student debt certainly seems more practical than other gifting traditions… like bridal registries.