I have heard of some nontraditional ways of paying off student loans since I began Student Debt Diaries over two and a half years ago. Some have paid off student loans by winning the lottery, and others have seemingly paid off student loans through bankruptcy. Recently, I was perusing my social media, and I discovered someone who had set up a crowdfunding page aimed at paying off his student loans. Although crowdfunding student debt repayment may seem appealing, it should only be pursued in a limited number of circumstances.
As many people already know, crowdfunding is when numerous online donors contribute a usually small amount of money towards a personal or charitable goal. In a way, crowdfunding is kind of an extension of the fundraisers many of us did in school when we had to sell candy or magazine subscriptions to pay for school trips and the like. However, people typically do not receive anything in return when they contribute to a crowdfunding campaign. Most of the time, people ask for crowdfunding contributions to pay for charitable causes or something of that nature.
The closest thing I have seen to crowdfunding student debt repayment is when individuals ask for help with medical costs. People can go into debt financing medical treatments, and the amount of money needed to pay for medical costs can be tens of thousands of dollars. My own father turned to crowdfunding before he passed away in order to contend with medical costs, and he was able to raise a five figure sum to help him with his problems.
However, crowdfunding student debt repayment is different than many other crowdfunding campaigns. For one, the amount of money needed to pay off student loans is typically substantial, and far exceeds the sum usually requested in crowdfunding campaigns. In addition, although people may disagree, contributing to someone’s student debt repayment is far different than paying for charitable causes.
As a result, there are a few things student debt borrowers should keep in mind when crowdfunding student debt repayment. The amount of a borrowers total outstanding student debt is critical to deciding whether a crowdfunding campaign is the correct way to repay this debt. Many student debt borrowers have hundreds of thousands of dollars in student debt. It is very difficult to raise even close to this amount through a crowdfunding campaign. As a result, it might be unfair to ask donors to contribute their money to a cause that will only help a tiny amount toward achieving that goal.
However, most student debt borrowers only have tens of thousands of dollars in student debt. Although it is unlikely that a crowdfunding campaign can raise this sum, it is not impossible. Indeed, I am sure we all know some people who were able to raise a similar amount of money through crowdfunding. As a result, if you have a more than insignificant chance of paying off a substantial percentage of your student loans, crowdfunding student debt repayment might be a solid option.
Also, the type of job that you have may also be an important factor when deciding on crowdfunding student debt repayment. As mentioned in a few prior articles, some borrowers in public service fields can have all of their student debt repaid after 10 years of qualifying payments. Such borrowers need to keep accurate records, and there has been some controversy surrounding the low number of application for forgiveness that have been processed recently. Nevertheless, it is very likely that if you follow the rules of public service loan forgiveness, you can have your student debt paid off within a reasonable amount of time.
Given this option for debt repayment, it may not make sense to attempt crowdfunding student debt repayment. If you work a public service job and try crowdfunding, you might have donors pay for debt that will just be forgiven down the road if you continue working in a public-interest field. As a result, it might not be fair to ask for crowdfunding donations under these circumstances.
Also, there are definitely some privacy concerns that come to mind when crowdfunding student debt repayment. Most people are pretty private when it comes to their student loans and finances. Most people don’t want others to know about their financial struggles, and discussing student loans can remind others of the issues they have with student loans. For this reason, most people do not like to publicize their student debt situation.
Crowdfunding is an extremely public process. Most crowdfunding campaigns can be searched publicly, so most people on the internet can find out about your crowdfunding aspirations. In addition, a successful crowdfunding campaign often requires a substantial amount of publicity. This includes posts on social media, mass emails, and any other way to get the word out about your crowdfunding efforts. If you are a private person, it might be difficult to come out of your shell and publicly discuss your debt repayment efforts, but take it from my experience, there are also a lot of benefits to spreading your student debt story.
All told, there are a number of creative ways to pay off student loans, and crowdfunding student debt repayment is becoming more and more popular. So long as you keep a few things in mind, and only pursue crowdfunding in the right circumstances, crowdfunding student debt repayment can be the right strategy in a number of situations.