Is Crowdfunding Student Loan Debt Really Possible?

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You can crowdfund pretty much anything these days, student loans included. At least, you can try.

You can start a campaign, but does it count as crowdfunding if no crowd forms to fund it? That seems to be the outcome for many looking to crowdfund their student loans on crowdfunding sites.

Does that mean it’s a bad idea? Not necessarily. More likely, it means many crowdfunders aren’t doing it right.

Crowdfunding student loan debt the right way

1. Rely on your family and friends for support

When you’re crowdfunding for a project or product launch, it’s easier to get strangers on board. When it comes to funding something as personal as a student loan, though, it’s going to be a tougher sell to people who do not know you.

That’s why you need to be able to rely on your family and friends for support. If you’re not comfortable asking them to support you with a donation, at the very least ask them to share your campaign with others, which will likely inspire them to give anyway.

Look at it like this.

I’m not going to ask my friends to do something that I’m not willing to do myself. So if my cousin, for example, asks me to share her crowdfunding campaign with the people in my network, I’m probably going to make a donation first. Or, if I decide I don’t feel comfortable sharing her crowdfunding campaign, I’m even more likely to make a donation so I can at least feel like I did something.

2. Choose the right crowdfunding platform

Some crowdfunding sites are more appropriate for student loan campaigns than others. Here are the most notable among them:

Generosity by Indiegogo: This platform focuses specifically on fundraising for personal and social causes. Indiegogo has been around for a long time, so it has good name recognition; Generosity is an extension of that. It’s also fee-free, with the exception of fees for credit card processing.

A search of “student loans” on Generosity turns up three dozen such campaigns, only a handful of which have raised anything toward their goals. One big exception is that of Kaila Jenkins.

Jenkins’ uncle started a campaign, speaking to the power of a third-party making an appeal on someone else’s behalf. Plus, the campaign name referenced “tuition debt,” as opposed to student loans. And Kaila was still in school at the time, meaning support would’ve enabled her to continue her education, not just pay down debt from education she has already received.

YouCaringLike Generosity, this platform focuses on personal and social causes. It too is fee-free, again with the exception of fees for credit card processing. Though it doesn’t have the name recognition of Indiegogo, YouCaring is worth checking out. You’ll find a user-friendly format and lots of great resources for making your campaign a success.

The most successful student loan campaign on YouCaring is that of Jack and Rachel Legg. Their storytelling is a little confusing, but the success of their campaign is likely tied to the sharing of their community service work (they run a church) and the nature of their monetary appeal, asking for one-time gifts of $20 from 4,000 people.

GoFundMeThis is a general crowdfunding platform, but one with a lot of student loan campaigns. Unlike Generosity and YouCaring, there is a hefty fee at GoFundMe – 7.9 percent of what you raise plus 30 cents per donation, as well as the fees for credit card processing.

GoFundMe is the platform used by Erin Fox, whose crowdfunded student loan campaign is the most successful I’ve come across. Erin tells her story well, striking a good balance between expressing the urgency of a dire situation and maintaining a friendly, positive tone.

3. Give your campaign a positive spin

Most student loan crowdfunders do just the opposite, going into lengthy explanations about what a horrible situation they’re in and how they got there. If that worked, it would be one thing, but most of these crowdfunders haven’t raised a dime.

While it’s important to share the challenges you’re facing, follow it up with a positive spin.

Something like, “If you help me with my student loan debt, you’ll be supporting the education I’m using to [insert all of the wonderful things you’ve done and plans you have for helping people through your work].

Make sure your photos and videos reflect the same positive attitude.

4. Offer to give something back

Take a cue from Zerobound and offer to do community service in exchange for help with your student loans. This is a reward you should be able to offer on any platform you use.

For instance, if your goal is $5,000, you could offer to do 50 hours of community service when the goal is reached.

You can also offer something tangible, provided it’s not something that will be costly for you. This can be especially meaningful if you’re artist, maybe offering a painting or photograph to supporters who give $100 or more.

Even a handwritten thank you card could be a lovely incentive.

5. Give some thought to your campaign name

You can do better than the standard, “Help Me With My Student Loan.” Get creative with it, again with a positive spin.

6. Create professional-looking content

People want to support people who take pride in themselves and in their work. Prove yourself to be one of those people by taking the time to create quality content. Make sure your text is well-written and free of typos. And make sure your pictures and videos are well-lit and in focus.

7. Set a realistic goal

Don’t expect your campaign to cover all of your student loan debt. It’s very unlikely you will raise $30,000 crowdfunding. Plus, potential supporters are far more likely to give to a campaign with a goal that sounds within reach (e.g., $1,000 to 5,000).

That said, be sure to mention the total amount you owe so that your supporters know what an uphill battle you’re facing and how much you’re paying on your own.

8. Allow the lowest possible giving minimum

This may sound like more counterintuitive advice, but the lower your minimum, the more likely strangers are to give. Those dollars add up, as do the number of backers that show up on your campaign page. And the more backers you have, the more appealing it is for new supporters to back you too.

9. Keep your campaign short

You want to create a sense of urgency. Give people too much time and they’ll assume they have plenty of it and then, before you know it, they forget about you and time runs out. Thirty days is a good minimum, 6 weeks at the most.

10. Give updates regularly

The more involved you are with your campaign, the more involved other people will want to be, too.

What should your updates include? Things like how much closer you are to your goal, requests that people share your campaign with others, reminders about the approaching deadline date, and appreciation for their support.

11. Use social media wisely

While you might expect a decent percentage of your Facebook friends to support your crowdfunding campaign, the same may not be said for your followers on Twitter, for example. It’s especially important there that you simply ask people to share your campaign rather than making direct requests for donations. Create your own hashtag, too, preferably tied to your creative campaign name.

12.  Give back what you promised

Say thank you and follow through.

Crowdfunding student loans is certainly a creative way to get rid of that debt, but you shouldn’t bank on it. Few student loan crowdfunding campaigns actually receive donations. However, if you follow all of these tips, you will be much more likely to successfully fund your debt pay off.

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1 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student Loan RefinanceFixed rates from 3.999% APR to 7.804% APR (with AutoPay). Variable rates from 2.480% APR to 7.524% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.480% APR assumes current 1 month LIBOR rate of 2.07% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

3 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.72%-8.17% (2.72%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.50%-8.69% (3.50% – 8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Average savings based on 18,113 actual customers who refinanced their federal and private student loans through our Education Refinance Loan between January 1, 2017 and December 31, 2017. The calculation is derived by averaging the monthly savings of Education Refinance Loan customers whose payments decreased after refinancing, which is calculated by taking the monthly student loan payments prior to refinancing minus the monthly student loan payments after refinancing. The borrower’s savings might vary based on the interest rates, balances and remaining repayment term of the loans they are seeking to refinance. The borrower’s overall repayment amount may be higher than the loans they are refinancing even if their monthly payments are lower.
2.57% – 5.87%Undergrad
& Graduate
Visit Earnest
2.80% – 6.38%1Undergrad
& Graduate
Visit Laurel Road
2.48% – 7.52%2Undergrad
& Graduate
Visit SoFi
2.47% – 7.99%Undergrad
& Graduate
Visit Lendkey
2.57% – 6.65%3Undergrad
& Graduate
Visit CommonBond
2.72% – 8.17%4Undergrad
& Graduate
Visit Citizens
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