College is expensive. With tuition, room, and board, textbooks, meal plans, and other expenses, college is a pricey venture. In fact, the price of college for students is going up a little each year, making it difficult for students to pay the cost of college on their own. Even students attending a four-year public university spends about $1,298 on textbooks per year, and that’s just the cost of textbooks for a full-time student. Combine that cost with the cost of tuition, room, and board, and transportation, and a student has to take out a loan just to pay it.
There are many ways that a student can pay for college. Student loans, Pell Grant, and scholarships are just a few of the ways. Of course, financial aid helps, but when student loans, Pell Grant, scholarships are not an option, crowdfunding is a great way to pay those high fees each year.
What Is Crowdfunding?
Donations given by family, friends, or perfect strangers online through a particular website is called crowdfunding. Usually, these sites are used by people who are in desperate need, those needing donations for a cause, or a group needing donations for a trip. Crowdfunding sites can be used to pay for college as well, though it isn’t quite as common.
Crowdfunding not only helps a student during school, but it also can be especially helpful to a student after graduation. According to The Balance, crowdfunding helps eliminate the excessive debt that a student is left with after graduation and before joining the job force.
How Does Crowdfunding Work?
The best part about crowdfunding is it is flexible. There isn’t a set of specific steps for each person to follow, and it gives students the opportunity to pay for their college without worrying about following standards.
Crowdfunding is for a student’s friends and family, yes, but it is not just for those people who are concerned about that student’s education. This stranger then becomes a direct lender to the student. Crowdfunding can also be set up for donations by strangers who the student or family of the student has never met. For strangers to donate, a special contract needs to be setup to ensure that the stranger’s “gift” from the student is kept. This contract is called a Human Capital Contract, and it states that a student will pay back either 10 or 20% of their income from a specific amount of years after starting in the workforce. This can be a gamble for the strangers, but most will take the risk.
Is Crowdfunding The Right Way To Pay?
The answer to the question “is crowdfunding the right way to pay” is entirely up to the student and the student’s family. Consider this, a student usually has to borrow money to pay for college, and this is no different than being bound to pay back 10 or 20% of income for the next few years. The difference between student loans and crowdfunding is the interest rates. A bank has set interest rates, whereas, with the human capital contract, it is based on the amount of income a student makes upon entering the workforce.
There are several different crowdfunding websites that make it easy for students or families of students to get started. Most of the websites offer helpful tips for setting up accounts and contracts for future gifts to donors. Though crowdfunding is a new and exciting thing for students, it can be an extremely useful tool for the enormous college bills each year or semester. Though it may be difficult to pay for college, crowdfunding makes it easy for friends, family, or even strangers to donate to the cause, helping students throughout the world earn the degree and career of their dreams.