Need Help With Student Loan Debt? Crowdfund It

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This post comes from Christine DiGangi at partner site Credit.com.

It’s easy for someone to tell you to follow your dreams if they don’t have to pay for them.

Then again, maybe they could.

Piglt (pronounced “piglet”) is a platform for crowdfunding higher education expenses and student loan debt. “Dreamers” promote their campaigns, set a fundraising goal and hope to connect with people — “Believers,” as Piglt calls them — who want to contribute.

But the money doesn’t go to the Dreamer. At the end of the campaign, the money raised (minus Piglt’s servicing fee and third-party payment fee) goes directly to the educational institution or the loan servicer.

Find investors and mentors

The platform is a bit like a cross between Kickstarter and LinkedIn. Believers are those who contribute to the Dreamers, but they can also create Believer funds for which Dreamers can apply. Dreamers can provide Believers with incentives that use their professional skills, like a painting from an art student or language lessons from a Spanish major. The platform can serve as a piggy bank and a networking tool.

There are two kinds of Dreamer campaigns: tuition and student loan. Tuition campaigns work for the future, enabling the Dreamer to pay for a class next semester or an upcoming certification course. As such, those campaigns are all-or-nothing, so a Dreamer doesn’t have to come up with the rest of the course fee in case he or she falls short of the goal. Believers are only charged if the campaign is successful.

The loan campaigns help pay for education costs a Dreamer has already incurred. (Like that pile of student loan debt.)

As far as how much a Dreamer can raise, the site encourages setting “realistic goals” on its FAQ page. It encourages that in practice as well, because Dreamers who fall short of their loan goals are charged an 8 percent fee, instead of the 5 percent charged for successful campaigns. (Failed tuition campaigns have no fees.)

A quick glance at the site showed active campaigns asking for between $5,000 and $75,000. A single campaign (for $466) was listed on the “success stories” page. With the higher processing fees on incomplete loan campaigns and the all-or-nothing tuition campaigns, smaller goals may be the way to go.

Higher education doesn’t just mean going to college or getting a law degree — it just has to be career education. By Piglt’s guidelines, an aspiring performer could crowdfund his voice lessons, as long as the payment goes directly to the company giving the lessons.

Ways you could use educational crowdfunding

  • Pay down your student debt. This is an obvious benefit. The faster the loans go away, the more money you save on interest.
  • Take extra classes. If you can add some classes to your course load or take summer classes, you may be able to graduate early — and cut out a semester or year of tuition.
  • Develop your skills. In any career, you can find a workshop or certification course to help make you more marketable. If the cost is keeping you from pursuing these opportunities, maybe someone can help you pay.

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