In recent years, more and more students have turned to crowdfunding to offset the cost of college. We’ve seen students run campaigns for specific expenses, such as textbooks and supplies, food, housing, transit, tuition fundraising, and studying abroad. It’s a great way to avoid taking out loans, and we cover all the options in How to Pay for College. Or if you’re making the transition to graduate school, see How to Pay for Graduate School Without Loans.
Sometimes, however, taking out student loans is unavoidable—but that doesn’t mean crowdfunding can’t come to the rescue. If you ran a crowdfunding campaign each year you were in college, why not run another to help get you debt free? If nothing else, crowdfunding student loan debt can dramatically reduce your loan balance.
And unlike student loans, the funds you receive through crowdfunding don’t have to be repaid—except in gratitude to the friends and family who support you. Once you’re established in your career, you can pay it forward, perhaps helping to support other students who need a helping hand.
Student loan debt facts
- You’ve probably heard about the staggering scale of the student loan debt crisis in the US. Total student loan debt now exceeds $1 trillion, and the default rate for students who’ve entered repayment within the past decade stands at around 11%.
- Unlike most other forms of debt, including credit card and consumer debt, student loans can’t be discharged—even in bankruptcy. In many cases, borrowers can’t even refinance student loans at lower rates when interest rates fall.
- Since a huge portion of your monthly loan payment goes to interest, absent a lump sum devoted toward the principal—such as the money you raise in a crowdfunding campaign—you’re likely to spend decades paying down your loans.
How does crowdfunding student loan debt work?
People use GoFundMe to raise funds from friends, family, and community members, which they then apply to their student loan balances. At GoFundMe, we have a 0% platform fee, and there’s no penalty for not reaching your fundraising goal. And you can withdraw funds as soon as you start receiving donations.
To pay off student loans through crowdfunding, we recommend following these steps.
1. Pick your platform
There are many options for online crowdfunding. Take a look at these 21 Top Crowdfunding Sites: Categories and Comparisons. GoFundMe, unlike other platforms, is free-to-use and charges no platform fee—which means you keep more of the money you raise If you’d like to see how we stack up against other options, check out Which Fundraising Site has the Lowest Fees.
When you’re choosing a crowdfunding platform, don’t underestimate how important it is that people can use it easily with a tablet or smartphone—or share your campaign on social media. GoFundMe is designed with mobile in mind—and has a robust mobile app—and is well integrated with all the social networks you can use to share your campaign. We also offer 24/7 support and a wealth of free fundraising resources—such as the post you’re reading right now—on our blog.
2. Set up your campaign
Creating a GoFundMe is easy. But just because it’s easy, don’t take it lightly—you’ll make several important decisions during the setup, including naming your fundraiser. This name will be the first thing people see on social media. For guidance on choosing an effective name, see Great Ideas for Naming Your Online Fundraiser.
3. Add photos and videos and tell your story
Your featured photo is the first thing people see when sharing your campaign. And don’t stop at just one—our data shows that campaigns with multiple photos raise significantly more than those with a single image. To learn more about using photos in fundraising campaigns, see How Images Can Lead to Fundraiser Success.
Video is another powerful tool for inspiring empathy in prospective donors. Videos can also reach people who can’t be reached by any other means. You can share them on YouTube, Twitter, Facebook, and other platforms, all with a link to your fundraiser. To learn more about using video effectively, see The Power of Video.
Ultimately, photos and videos help you tell your story—the heart of which is your campaign description. Telling your story honestly and clearly is essential. Not sure where to start? We’ve put together some helpful storytelling tips in Your Crowdfunding Campaign Story: A Comprehensive Guide.
4. Share your fundraiser
Sharing is powerful—and the best way to maximize donations. Each time you share your GoFundMe fundraiser on Facebook, that campaign will net an average of $43. For a detailed guide to effective social sharing, see Using Social Media to Promote Your Fundraiser. There are other ways to share your campaign, too. Take a look at Online Fundraising Without Social Media: 42 Ways to Share Offline and learn how to boost awareness in 15 Simple Ways to Skyrocket Awareness for a Cause.
5. Follow up
Posting updates to your supporters keeps them informed of your fundraising journey—and updates can lead to more donations and more sharing, especially when they highlight your progress. Writing an effective update is an art, and we cover all the details in How to Write a Fundraising Update.
Thank-you notes are another essential fundraising tool. If you assemble a fundraising team, we suggest having one person focus on writing thank-yous. For some ideas, take a look at 20 Affordable Ways to Say Thank You to Donors. And remember that thanking donors is not only the right thing to do, it can help your campaign flourish—see Viral Fundraising: Make the Most of Your Campaign’s Potential.
See how crowdfunding helped Shannon offset her debt
After Shannon Otto was featured on The New York Times podcast “The Daily,” people responded to her story of having her nursing license suspended after falling behind on her student loan payments. A listener started a GoFundMe for her, but it turned out she already had one set up—and it ended up raising more than $9,000. Check out her fundraiser: Shannon Otto Student Loan.
Crowdfunding can reduce or eliminate your student debt
Crowdfunding is a great way to cover the costs of college—before you start, while you’re in school, and after graduation. Whether you’re raising funds proactively or retroactively, we’re here to help you every step of the way. The sooner you pay down your balance, the less time it will take you to be debt free. Start your crowdfunding campaign today.