A group of community-minded start-ups hope to ease the burden of college tuition with the concept of crowdfunding.
Striking out on your own is hard, but it's even harder with college loan debt.
It's no surprise, then, that a number of start-ups have popped up recently with the mission of tackling America's student loan crisis.
According to Federal Reserve Bank of New York, this debt has almost doubled since 2007 and is nearing $1 trillion. In fact, it's already surpassed the mark of auto loan debt, which is somewhere in the neighborhood of $783 billion, and credit card debt, which stands at $679 billion.
With almost 40 percent of student loan borrowers owing up to $10,000 and 30 percent more owing up to $25,000, these start-ups have their work cut out for them.
Here are six hoping to lessen the burden:
Campus Slice This "social funding platform helps you slice your tuition bill by getting support from your family and friends," says its website. By setting up an education and funding goal, and then inviting family and friends to help reach them, students can effectively crowdfund their education. Supporters are asked to make small monthly contributions, thereby keeping costs down while providing the student with a steady flow of income.
GiveCollege On this crowdfunding site, parents must register their child's 529 college savings plan on GiveCollege's platform, taking care to mention fundraising opportunities--birthdays, holidays, graduations, etc.--and invite friends and family to contribute.
By selecting the type of college parents want their child to attend, GiveCollege can predict the cost of the tuition. "We do this based on the college type you chose, your child's age, the average cost of that college currently, and then the average increase in the cost over the past few years," says Angela Merrill, co-founder.
GradSave This start-upaims to crowdfund college tuition, allowing young people to receive monetary birthday and holiday gifts that directly go toward college savings plans, CEO Marcos Cordero told Inc.
"Friends and family can contribute directly to their savings in lieu of other temporary gifts," so graduates can "focus more on accomplishing dreams of entrepreneurship rather than on paying back loans."
Pave With Pave, prospective students can set up an "innovative social-financial agreement." What does that mean exactly? Students accept a one-time payment from backers in exchange for "a small, affordable percentage of income over a period of 10 years," sort of like selling stock in themselves. The success of the prospect is in their best interest, so backers might opt to provide career guidance, mentorship, and network connections.
Tuition.io This start-up is "saving students and graduates time and money, while working with the lenders to streamline the entire process so that everybody wins," says founder Brendon McQueen. Like Mint.com but with a focus on loan debt, Tuition.io helps users manage their student loan portfolio by providing helpful reminders, personalized advice, and tools such as customized payment plans.
Upstart Similar to Pave, this start-up lets grads barter funds for "a small share of their future incomes," per its website. "The idea of Upstart is, can you provide a window of economic freedom as well as some guidance and mentorship for people that want to take a non-traditional path?" says founder Dave Girouard.
JANA KASPERKEVIC is a graduate of Baruch College, City University of New York, where she earned a bachelors degree in Journalism and Political Science. She covers start-ups, small businesses, and entrepreneurship for Inc. Her work has appeared in The Village Voice, InvestmentNews, Business Insider, and Houston Chronicle, among others. She lives in Brooklyn. @kasperka