Crowdfunding Your College Education

By Fool.com

You'd think the college tuition bubble would've burst by now, but, like it or not, tuition costs are still on the rise. If you're planning to enroll as a student in the near term, be prepared to pay up. According to U.S. News & World Report, tuition costs rose around 3% for the 2014 to 2015 school yearcompared to the last school year, during which time the average price tag for tuition and fees was $8,709 for public, in-state schools, $19,867 for public, out-of-state schools, and $31,381 for private schools. None of these figures include dorm costs or living expenses, nor do they encompass books, computers, or other such student essentials.

Slapped in the face by student debtIf you're among the many soon-to-be college freshmen pursuing your options for financial aid, consider this: According to a report by The Project on Student Debt, approximately 69% of 2013 graduates brought home a mountain of debt along with their diplomas. Those who took out loans borrowed an average of $28,400 -- up 2% from the previous year's tally.

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A more disturbing figure is the number of students who resorted to private loans to fund their education. Approximately 19% of 2013 graduates who took on student debt turned to private lenders as opposed to safer, more affordable federal loans. Of course, federal loan rates are by no means low. As of July 1, 2015, federal student loan interest rates ranged from 4.29% to 6.84%. But because private loans are often based on credit history (and really, how many college students can boast a stellar credit history?), their associated rates can be exponentially higher. Furthermore, private loans lack many of the benefits and protections afforded by federal loans, such as unemployment deferment and forgiveness programs.

If the idea of taking on loads of student debt sounds downright unappealing, you do have other options to consider. You could try earning a merit-based scholarship, working part-time throughout high school and earmarking whatever you earn toward tuition, or deferring college enrollment for a year to work full-time and save.Or, you could do what some unabashed aspiring college graduates have done lately: Ask strangers to fund your college education.

Skip the loans and ask for moneyYou've probably heard of crowdfunding as a means of raising money for charity or helping small businesses and projects get off the ground, but some ambitious college students are now jumping on the bandwagon to cover the cost of tuition. GoFundMe, a popular fundraising site, reports that campaigns seeking to pay for tuition rose a whopping 4,547% from 2011 to 2014. In fact, in 2013, students launched a total of 41,683 GoFundMe campaigns and collected a combined $4.63 million for education costs.

There's even an app that allows you to raise money for tuition. Launched in 2014, GoPYT, which stands for "Go Pay Your Tuition," works like a traditional crowdfunding platform but limits its scope to educational fundraising. Students who sign up must complete a detailed profile, and once vetted, can set up campaigns to solicit tuition funding and avoid becoming inevitable participants in the ongoing student debt crisis.

How to pull it offIf a lifetime of student loan payments sounds unappealing to you and you're willing to put yourself out there, crowdfunding may help offset the astronomical costs associated with present-day tuition and enable you to reduce your post-college debt. But because crowdfunding an education is no longer a new concept, you'll need to be strategic in your approach.

First, crunch your numbers in advance so that you know how much to ask for, and make sure your goal is both reasonable and attainable. Asking for $100,000 to fund your education may not serve you as well as establishing a goal of $10,000 to pay the tuition and fees your federal loans won't cover.

Next, tell your story as honestly as possible. Be transparent about the costs you're facing and why you're seeking outside help. Don't be afraid to appeal to people's emotions, and bonus points if you're going to use your education to better a specific corner of the universe, be it your local community or sick children overseas. Don't lie, but if your goal, for example, is to become an environmental engineer, channel your inner hippie and talk up the ways you'll be using your degree to clean up the planet.

Once your story is written, get ready to blast it out to your social network, and don't be shy about asking friends to share your campaign with their contacts. The more people you reach, the better your chances of getting funded.

Finally, choose a crowdfunding site with low fees. Most take a 5% cut of donations once the campaign's goal is reached, so shop around before launching your appeal.

Of course, crowdfunding doesn't work for everyone. There's no reason not to at least try it -- but when you do, keep your expectations in check. Remember, even if you only manage to shave a small fraction off your obnoxiously large tuition bill, every dollar you raise is one less dollar added to your ultimate loan tally upon graduation, and the only thing it'll cost you to collect those donations is a little time and faith in humanity.

The article Crowdfunding Your College Education originally appeared on Fool.com.

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