By Jesse Collier. Updated June 2017.
Another school year is approaching fast, and with it comes the dreaded question, how will you fund your education?
With crowdfunding of course! Most students don’t think about crowdfunding as a viable source to crowdfund their tuition. Yet it’s worked with many other students, so why not try it out for yourself?
Over the past decade, tuition costs have risen 40 percent, government aid is lower and lower, and scholarships are just as elusive as ever. With tuition costs out of reach for many students, it’s no surprise that many are looking for alternative (and unusual) ways to pay for their degree.
If you have a great story to tell or have helped people in the past, this may just be the option for you! However, crowdfunding can become a full-time job and will take dedication and hard work. Think about whether this is the best option to pay those pesky tuition costs.
If you’ve already landed on the “yea” side, then read on and discover how this can be the most lucrative way to fund your costs.
What is crowdfunding?
Crowdfunding is when you ask friends, family, and others to help fund your tuition through donations.
In order to set up a crowdfunding campaign, you have to first setup an online crowdfunding page from a popular crowdfunding service (more on that below). You can then spread the word about your campaign so that people will recognize your efforts and donate to your cause.
On your crowdfunding page, you begin by telling your story and why you need the money to pay your tuition. You set a fundraising goal that relates to the cost of your studies. Make sure you’re accurate on this part. Someone can easily look up the cost of your degree and wonder why you set a goal of $15,000 when your degree costs $10,000.
Careful! If you set the goal too high and don’t raise enough money, you won’t receive any of it and it will be returned to your donors!
Who can crowdfund?
Anyone can crowdfund! If you have a good story and want to change someone’s life, or if you have a specific cause in mind, then crowdfunding is for you.
Yet it may be easier for some students than others. For example, average tuition in Canada for each year of an undergraduate degree is about $6,373. So if you have 3 more years to go, that would be about $19,000 you would have to set as a goal to fund your tuition. That also doesn’t cover living costs and bills.
Graduate students end up paying a lot more than that, especially in specialized programs such as an MBA. This is also the same case for students in the US. However, graduate students usually have a more focused point of study that people could potentially rally behind.
Whether you’re an undergraduate or post-graduate student, you should definitely still consider crowdfunding your tuition as a viable option.
Why Would Someone Invest In You?
In some cases, having a rich uncle or a wealthy grandparent will help you. Yet most people are left with asking for money from friends and family. People understand what students have to go through, especially with tougher economic times. If they’re close to you, they’ll be more willing to help out.
It can be hard to just ask your Uncle Timmy for a grand to cover your books and fees though. Crowdfunding your tuition allows you to create a stress-free way of asking the people you know and complete strangers for donations.
Yet most people (especially strangers) are not inclined to just give you money for nothing. Most people expect something in return.
The question is, what?
Some people go for promises of volunteering for a set number of hours for an amount of money raised. Others decide to make little gifts to send to their donors if they donate a certain amount. And still others choose to make a “Human Capital Contract“.
The Human Capital Contract
If you’re crowdfunding your tuition, you may want to try something called a Human Capital Contract. This is when people invest money into your cause (most of the time it’s for tuition) in return for 10% or even 20% of your future income over a specified period of years. Think of it as selling stock in yourself.
Obviously this would depend on what you plan on doing as a living. Investors are taking risks because you may not get that awesome, high-paying job.
Should you make a contract to pay out a portion of your income in future years? If you are currently taking out loans (either government or private), you’re doing that anyways. The difference is that government and bank loans will have specified interest rates that won’t fluctuate. You also only pay one institution, whereas you may have to sign multiple contracts with different people.
So it totally depends on how comfortable (and desperate) you are to have people invest in you, with the expectation of returns in the future. Therefore it’s a good thing to think about average salaries in your field and whether Human Capital Contracts are the best option for you.
Pros and Cons of Crowdfunding Your Tuition
- It’s money in your bank to pay for the important things now
- It can be very rewarding to see so many people – even people who don’t know you – get behind your efforts.
- You will be a lot more motivated to see that your investors are getting their money’s worth. This will translate into more dedication on your part towards your studies.
- It’s a marketable skill. Having a successful crowdfunding campaign under your belt will show that you can dedicate yourself to a task and see it through.
- You may get some backlash from people (especially students) who have to pay for their own costs out of pocket.
- You will need to stay dedicated, especially if people have invested their hard-earned money on your success.
- If you don’t reach your crowdfunding goal, all of the money raised will go back to your investors and all your hard work will be for nothing.
Tips for crowdfunding your tuition
1. Create a blog – create a blog and write in it daily to keep your followers updated on your campaign. Don’t forget to link to it on your campaign page!
2. Focus on others – remember to center your campaign on how you are helping others. This could be in the form of promising to volunteer at your local animal shelter or making little gifts for people.
3. Stand out from the crowd – find a way to make your campaign different from others. Being unique when crowdfunding your tuition will make people all that more likely to donate to you.
4. Talk to people around you – your friends and family will most likely be your biggest fan base. Talk to them first, then expand your circle.
5. Don’t create a goal you can’t reach – or else you will lose all your hard work.
The top websites to crowdfunding your tuition
Many students decide to use GoFundMe because the platform focuses more on the individual contributions of different people.
This site will be a good choice if you have a good story to share that will make an impact on people. This could be hardships faced before going to uni or another similar story.
Fees: 7.9% + $0.30 per donation. 5% is from GoFundMe and the rest is from card processing fees.
IndieGogo is another crowdfunding platform, but it caters more towards the creative idea space. It’s similar to KickStarter in that it has a lot of people pitching product ideas to potential investors.
Yet unlike KickStarter and other similar platforms, IndieGogo also has a place for people like you who want to crowdfund for personal reasons or for good causes.
Fees: 8% + $0.30 per donation.
YouCaring is another crowdfunding platform that allows fundraising for many different causes.
This platform has a few surprises though. For one, they don’t charge platform fees. They only charge the fees that payment processors use for payments. Also, they allow you to keep the money raised even if you didn’t reach your goal.
Fees: 2.9% + $0.30 per donation.
You give it a shot
Now armed with all of this knowledge, you give crowdfunding your tuition a shot. If this guy can crowdfund over $1,000 for a burrito from Chipotle, then you can too!
Let us know how your campaigns go and good luck!