You’re not in this alone.
You’re starting to prepare financially for your child’s college, and you realize you can’t do it alone. And it’s no wonder. The U.S. Department of Education estimates that by the year 2030, the cost of a four-year degree at a public university will top $205,000.
You’ve heard about crowdfunding, and it seems like everyone from budding entrepreneurs to couples hoping to pay for their honeymoon are using it. So why not for college? Read on for the top five crowdfunding sites for education, and compare fees, features, and where the money goes.
But before we start: One major difference between these sites is whether the money is contributed into a 529 college savings plan or simply withdrawn as cash. If you are not sure which is best for you, it’s worth educating yourself about 529 plans and how they can help you save for college through tax-free growth and tax-free withdrawals (like a Roth IRA, but for college), or whether a 529 is right for your child at all.
Perfect for a family with younger children, CollegeBacker allows you to crowdfund college savings and invest those dollars in a recommended 529 college savings plan.
CollegeBacker has no fees, except credit and debit card processing fees, but if you pay a voluntary “tip,” then 10 percent goes to helping low-income student save.
Plus, there are additional tools to help you determine a personalized savings goal, and you can accept both recurring and one-time contributions.
Pros: Low fees. Your savings grow over time.
Cons: Relatively new to the scene.
GoFundMe is well known for its emphasis on personal fundraising. But did you know the platform is a major player in the saving-for-college game? Since 2014, GoFundMe has raised over $60 million for college-tuition campaigns.
They also offer an education section on their platform and a guidebook to assist education-related fundraising, available even if you don’t decide to use the platform.
However, the fees are a bit steep: five percent on all transactions, plus payment-processing fees of 2.9 percent plus 30 cents per transaction.
Pros: Very well-known site, potentially more easily recognizable by family and friends.
Cons: Significant fees. No 529 support.
Ugift helps you raise funds for preexisting 529 college savings plans. By inviting family and friends through a code, they can also contribute to your 529 plan.
However, since you need to start (or already have) a 529 plan, this approach requires more setup than other sites. And it doesn’t offer tools to help you easily inform family and friends about how they can help contribute like crowdfunding sites do.
Also, credit cards are not accepted — only bank transfers and checks.
Pros: Your savings grow over time in a 529 college savings plan. Ugift charges no fees.
Cons: Requires significant setup and personal outreach. No credit card support.
YouCaring brands itself as a “compassionate crowdfunding platform” and hosts personal and charitable fundraising. Like GoFundMe, it offers a section focused on tuition and other college-related expenses. Like CollegeBacker, YouCaring does not charge a mandatory fee aside from third-party processing fees, and it accepts various currencies.
Pros: Accepts multiple currencies. No mandatory YouCaring fees.
Cons: No support for 529s or other dedicated educational savings vehicles.
The world’s largest crowdfunding platform, Kickstarter focuses on crowdfunding for creative and time-sensitive projects. However, it does not have special features or sections for educational purposes.
Kickstarter charges a flat fee of five percent of total funds raised and a payment processing fee of three percent, plus a flat fee of 20 cents per pledge. It also charges a “micro pledge” fee of five percent plus five cents per pledge for pledges under $10.
Also worth noting: If the goal isn’t reached, no funds are collected, and your college fund will be back at zero.
Pros: Largest crowdfunding platform.
Cons: No education category, so you may have difficulty getting onto Kickstarter. All-or-nothing funding can result in a loss of funds. Significant fees.