Student Loan Payment: Crowdfunding Your Loans

College is expensive. Tuition itself is bad enough, but then you have to worry about fees, lab expenses, textbooks, and more. Of course, you also need someplace to live and something to eat. That adds up to a serious bill for your education.

To make matters worse, the job market is still recovering from the 2008 crisis. Graduates are having a hard time finding jobs and the jobs they do find often offer low salaries. That leaves a generation of well-educated, unemployed or underemployed, debt-burdened people wondering what to do next.

Some students and grads are pursuing a new solution to the student debt problem: crowdfunding.

What is crowdfunding?

Crowdfunding is the practice of raising money through donation from a large group of people for a specific cause or project via the internet. Many crowdfunding websites serve as platforms for donations toward a family suffering from the high cost of a serious injury or long term illness or a recent death. Others may focus on a cause like raising money for a family to adopt a child. Still others help people raise money to build inventions or create art. The crowdfunding process usually involves creating a page or profile explaining why you are trying to raise money. The public can see your page and choose to donate.

Recently, a growing group of cash-strapped graduates and students have turned to a variety of crowdfunding platforms to subsidize student loans or pay for tuition.

How To Crowdfund Your Education

What should you consider when deciding whether to use crowdfunding to help ease the burden of your student loan debt? First, are you looking to crowdfund an existing loan or tuition bill or are you hoping to use crowdfunding as a source of lending?

Crowdfunding Options For Student Debt

If you already have student loans, there are a number of crowdfunding platforms that can help you pay them off. These platforms are not lenders – the money is donated to you and you don’t have to pay it back. is a platform which allows you to create a personal donation campaign with a goal amount and share it with the public online. In many cases, the campaigns raise more than the requested goal. The total fee in the US is 7.9% (5% to GoFundMe and 2.9% to WePay, their payment processor), plus $0.30 per donation. is another international crowdfunding platform that can be used to pay for education-related expenses. With this platform, the fee structure is broken in 2 categories: flexible and fixed funding.


Flexible Funding

Fixed Funding

You reach your goal5%5%
You don’t reach goal5%0% – your contributors get refunded. Transaction fees do not apply for refunded contributions.
Third party fees
  • 3% plus 30 cents per transaction for credit card processing
  • 3-5% for PayPal transactions
  • $25 wire fee: You are charged once if you run a non-US campaign and have raised funds in USD via Direct Credit Card. We charge the wire fee when funds are wired in one lump sum to your non-US bank account after the campaign has ended.
  • Additional currency exchange fees may also apply.

Indiegogo charges your donors a fee and will refund all donations with a fixed funding campaign if your target amount is not met. is a community-based fundraising site to help finance all manner of education-related causes and debt. It classifies those seeking funding as “dreamers” and those seeking to contribute as “believers.” The only requirement for a dreamer is that you must be 18 or older and currently be a U.S. resident (and attending a school in the US if your campaign is for tuition). PigIt does charge you a 5% fee if your goal is reached and 8% if it is not met.

Crowdfunding As Lending

While many of these crowdfunding platforms are geared toward individuals already in debt, other options cater to those who want to raise money before spending. Several of these crowdfunding sites focus on P2P lending (peer to peer). P2P allows the parties to lend and borrow without the use of an official financial institution as an intermediary, eliminating red tape and additional fees. is a P2P lending platform that helps students and graduates secure loans and refinance existing loans through individual and institutional investors at competitive interest rates., also known as Social Finance, Inc., is another P2P lending site that enables you to secure student loans or refinance existing student loans with accredited investors. SoFi’s looks at employment history and account merit when determining whether to underwrite a loan. touts itself as a compassionate crowdfunding site that provides free fundraising in a variety of categories, including raising money for your tuition. The only fees associated with this platform are the credit card processing fees of about 2.9% and $0.30 per transaction. follows a different strategy than the other lending options. It allows you to pledge a percentage of your future income in exchange for money today to allocate toward your education expenses and tuition.

Is crowdfunding right for you?

Crowdfunding offers new possibilities for students, giving you access to a sympathetic public and making it easy for your friends and family to contribute to your cause. Before starting a crowdfunding campaign, compare different crowdfunding platforms to make sure they fit your needs. For example, check the fee schedule and the eligibility requirements for each site. Make sure you know whether contributions are donations that you can keep or loans that you’ll need to pay back.

If crowdfunding isn’t right for you, we may be able to help you manage your student loan debt. Contact us today for a free consultation to learn about your options for dealing with student debt.

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