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. One of the most feasible ways to eliminate student debt is to create a GoFundMe student loans debt campaign to zero out your payments.
Graduate from your interest fees.
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 GoFundMe Student Loans
Sites like GoFundMe and DonationTo 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.
When crowdfunding to pay off student loans, 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, like GoFundMe student loans crowdfunding escape plan.
Bonus: 4 Tips to Repay Your Student Loans Faster
A student loan can keep you from qualifying for a car loan or mortgage later in life.
Repaying your student loans faster can keep you from accruing excessive debt in the future.
The less debt you have, the easier it will be to pay your monthly bills, make major purchases and save for retirement. Here are some ways to pay off your student loans faster.
1. Make larger payments
If you have the resources, increase your monthly payments.
You'll pay down the principal faster and pay less interest. Use an amortization calculator to see how much you'll need to add to each payment to shorten the term of your loan.
If you can repay a 10-year loan in 5 years, you'll free up money that you can invest, save for a down payment on a house or use for other needs.
2. Create a student loan repayment fund
Open a separate savings account specifically for paying off your student loan and fund it with automatic deposits from your regular bank account.
Choose a high-interest savings account or mutual fund to ensure that your money grows.
Once the account reaches a predetermined amount, put it toward your student loan.
These extra payments will reduce your loan balance and help you reach the final payment sooner.
3. Earn part-time income
Taking a part-time job while you're still a student can enable you to start repaying your loan while you're still in school.
This will significantly reduce the amount of interest and you'll graduate with less debt.
A part-time job is also valuable work experience that can help you get a full-time job once you graduate.
If you are creative, say an artist, or have a following and you know how to produce consistently, there are many platforms, like Patreon, where you can earn part time while creating for an audience that pay you on a subscription basis.
4. Budget for your loan
Once you start working, budget a fixed amount for your loan payment.
This amount should always be higher than your minimum payment. Larger payments reduce the amount of interest your pay over the life of the loan and will help you repay it faster.
Paying off your student loan ahead of schedule can make your money available for other expenses. It can also reduce the amount of interest you pay and save you thousands of dollars over the life of your loans.
These four tips will require some discipline, but they'll save you money and help you get free from student debt as quickly as possible.