Going to college can cost $100,000 or more. Most people can’t afford that, so they take out student loans to fund their studies.
But what good is your college degree if you can’t make the minimum monthly payment on your debts?
Crowdfunding your way out of student debt could be the answer:
You Can Run But You Can’t Hide
Unfortunately, in the U.S.A. you won’t be able to get out of repaying your student loans.
Your options are three:
- ask for a deferment,
- ask for a forbearance,
- or to apply for an income-based repayment plan.
A deferment will postpone your payments and no interest will accrue.
A forbearance will postpone your loan payments, but the interest will continue to accrue on the amount that you owe.
If you enroll in an income-based repayment plan, your monthly payment will be no more than 15 percent of your discretionary income. You may owe nothing if you have no spare cash at the end of the month.
A deferment or forbearance lets you delay making payments on the principal of your student loan, but interest still accrues.
In some cases, you may need to make interest-only payments if you have been out of school for more than six months.
After 25 years, whatever loan balance remains is “forgiven.” However, the government will consider the amount as income, which could trigger a large tax bill.
As you can see, all three options provide short-term relief but could ultimately cost you more.
When you don’t want to deal with the burden that comes with student loans, there are other ways to pay for your tuition.
Crowdfunding Your Tuition: Alternative Repayment
Sites like GoFundMe, DonationTo and YouCaring let you raise funds to cover your tuition fees or to pay off loans you have already accumulated. While you may feel a little sheepish about asking strangers for help, there is no harm in asking.
A recent addition to the crowdfunding space (see video below) is Pedul a startup built to help students crowd fund their education.
You don’t have to ask for money without offering something in return.
Many fundraising sites let you offer rewards based on individual contributions.
For example, you could send a handwritten letter to anyone who donates $5 or send arts and crafts to those who donate $20. You must pay tax on the money received, but any funds spent on rewards may be tax-deductible.
Anyone struggling with student loan debt must accept that the problem will not go away.
The government can garnish your wages and private lenders are not obligated to forgive debt.
Student loan debt isn’t eliminated through bankruptcy, so there is no easy way out of this quandary.
Asking others to help you with your loans can put your finances in order. Or you can start your own product via other avenues of crowdfunding, see below.
Recommended Crowdfunding Articles
- How to Ensure That Your Kickstarter Campaign is a Success
- This Is Your Big Break: Crowd Funds
- How to Succeed with Patreon
- 5 Reasons to Choose Patreon for a Crowdfunded Project
- Crowdfunding for Startups Primer