Kickstarting college: Students use crowdfunding to help pay for school
Crowdfunding campaigns for tuition, textbooks, and other college-related costs are growing in popularity. But is it a sustainable solution when a student’s financial aid package is not enough?
When Abigail Covington, a recent high school graduate from Washington, D.C., got accepted into Syracuse University in central New York for the coming fall, she still needed $5,000 to afford her freshman year after receiving her financial aid package.
Her mother, the provider of her household, had been on sick leave since December 2014 after being diagnosed with cancer. Instead of taking out more loans, Ms. Covington decided to try closing the gap with an online fundraiser. She launched a GoFundMe campaign on July 12. It took her just one day to reach her $5,000 goal, and she has since received over $7,000 in donations.
“I was really excited,” says Covington, who will use the money for tuition, textbooks, and a winter coat. “I thought it would take two weeks.”
Filling the gaps
A growing number of students like Covington are turning toward crowdfunding – financing a project or venture through donations from a large group of people – to help ease the growing financial burden of higher education. The concept itself has been around for some time: it took two crowdfunding campaigns to finish the Statue of Liberty in 1885, for example. But on the Web, fundraising platforms like Kickstarter and GoFundMe have given the practice a new ubiquity, with fundraising drives for everything from independent film projects to WiFi-enabled coolers.
Campaigns in GoFundMe’s "Education, Schools & Learning" category are among the platform’s most numerous, company media director Kelsea Little writes in an e-mail. Since the San Diego-based web platform’s launch in May 2010, she says, 325,000 education-related campaigns on GoFundMe have raised more than $44 million.
The appeal is obvious. For in-state undergraduate students at public universities, tuition and room and board cost an average of $18,943 during the 2014-15 school year – a three percent increase in costs from the year before, according to College Board. At private four-year colleges, the price tag was $42,419 per student – a 3.6 percent increase year-over-year.
Eighty-five percent of students received some form of financial aid during the 2012-13 school year, according to the US Department of Education. On average, college students last year received $14,180 in grants, federal loans, tax credits, and Federal Work-Study – less than average bill for a freshman attending school in-state (who is typically getting the best bargain available for his college education). And additional costs in the form of textbooks, meal plans, and lab fees, among others, can add up quickly.
Successful one-time campaigns like Covington’s may demonstrate the most potent use for crowdfunding in the realm of higher education – it can help close those gaps between financial aid and actual costs, even if just for a semester or two. Between 2013 and 2014, the education-related category on GoFundMe saw a 280 percent increase in donation volume. A search of the words “college tuition” on the platform will turn up more than 30,000 current campaigns.
“As you can see from the figures, crowdfunding for educational costs is skyrocketing in popularity and we expect to see the trend continue,” Ms. Little says. “ Beginning a new educational journey is usually an expensive chapter in someone’s life, and inviting the support of family and friends is a natural response.”
Concerns over unequal access
Still, experts have doubts about the method as a sustainable solution to the college affordability crisis.
“It might be an effective tool in emergencies,” says Lande Ajose, the executive director of California Competes: Higher Education for a Strong Economy, an education policy think tank. “It would be a very crowded field” if people on a wider scale asked for money every year, she says.
Furthermore, she says, it it’s a long shot for crowdfunding to work for the low and middle-income students who need the most help, because people in their social circles typically don’t have much money to donate.
“A student who is needy would need to have some sort of champion with disposable income,” she says.
Rae Edie, from Seattle, has faced this issue with her GoFundMe campaign. Working full-time since age 18, she says she has saved up $5,000 for community college and had hoped to raise $50,000 to attend a university afterwards to study nutrition. But her campaign, which she launched in August 2014, has only raised $485, with most donations coming from friends. Edie says she is grateful for the money she has already received, but she has found it difficult to find help outside of her social circle.
“After five or six times of presenting the fundraising page to your same realm of people, it makes less of an impact each time,” Edie writes via e-mail. “The people who achieve their goals off GoFundMe either have a large group of people around them who are more than willing to contribute large amounts, or are able to get better publicity and therefore their story is better known, resulting in more donations.”
Covington, meanwhile, had a little help in expanding her funding circle. Many of her donations came from alumni of her boarding school, the private Madeira School in McLean, Va., after one her former deans saw the campaign and put it out to contacts in her professional networks. She also had friends and fellow classmates share her campaign across social media.
Not a policy matter...yet
Crowdfunding to cover college costs is becoming a more widely-known phenomenon on college campuses. Boston University’s newspaper has reported on it. Even if successes like Covington’s become commonplace, however, Dr. Ajose believes it would be a stretch for colleges to change the way they distribute aid to students.
Currently, when colleges package financial aid for a student, they expect students or their families to make some contribution, but they are not too concerned with where the money comes from. If colleges had information that an increasing number of students were crowdfunding money, then maybe they could expect a bigger contribution from students, she continues.
For the most part, however, colleges do not know who is helping pay their way through crowdfunding, and they don’t ask. Stonehill College, a liberal arts college in Easton, Massachusetts, does not require students to tell the school if they raised money for expenses through crowdfunding.
“There is no requirement to do so now, except to ask recipients what private scholarships they have received,” writes Martin McGovern, a spokesman for Stonehill College in Easton, Mass., via e-mail. “We have, however, noticed a small but emerging trend of students turning to crowdfunding to help with costs associated with projects like our alternative spring break program.”