As college costs grow beyond the average American's ability to pay, creative financing for higher education is poised to become the next big thing in education and finance. What it will look like remains to be seen, but you can bet it will be on-line. One organization that is out front on the creative financing is AngelDorm, a website designed to help students fund their education through donations via social media. According to the press info:
With Angeldorm.com students actually create an online "dorm" that becomes their fundraising hub for receiving contributions for their college tuition, fees, books and campus housing. They then can use their social media sites to share their dorm to raise money from potential doners. It's perfect for friends and family to donate to the student's education. Plus, the money goes directly to the university, so no need to worry. It's great for gift giving at birthdays, high school graduations, weddings, baby showers etc.
With student debt nearing $1 trillion and becoming the fastest growing sector of personal debt, there is growing pressure on families already struggling to pay mortgages and other loans. From 2000 to 2010, tuition soared 33 percent while private college loans rose by 592 percent over that same span.
Angeldorm aims to reach everyone in the student's family tree – not just parents but also brings aunts, uncles, siblings and cousins into an expanding circle that reaches friends, neighbors, religious congregations, civic groups, clubs, employers, coaches, teachers, fraternities, sororities – anyone who might wish to give something more than warm wishes to college kids who need a financial lift. The student can also elect to tell their story to a broader audience of people they do not know personally but who might find their story compelling. The Angeldorm system will follow the crowdsource model that has made meaningful changes in political campaign funding by turning small donations from the American middle class into political heavyweights.
The Model: Getting Ahead, Giving Back. Angeldorm enables donor contributions in amounts that middle class people can manage: The Halo ($25 to $49); Tassel ($50 to $150); Wings ($150 to $250); and Angel ($250 plus). Angeldorm has built a seamless and credible records system to accurately track donations, fees for credit card transactions and a flat $2.75 per transaction fee to support the network with a sustainable financial model. Fidelity Investments, one of the largest college plan providers, offers Angeldorm students professionally managed tax-advantaged 529 accounts to facilitate setting up a plan, but students can also use any provider of their choice.
Who knows where this is going next? As parents and students consider their options for the future, their most important asset will be information and access. AngelDorm looks to be worth checking out.
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