In an ongoing effort to find ways to cover college costs I've come upon something called "crowdfunding". Rachel Louise Ensign wrote about it in the Weekend Investor section of The Wall Street Journal of October 20-21, 2012.
One new website, Upstart (www.upstart.com), allows
...'accredited investors' - generally, those who earned
$200,000 or more in each of the last two years, or have
a net worth of more than $1 million, not including a
primary residence...(to) loan money to a specific
recent graduate in exchange for a portion of his or
her income for the next ten years. The money can be
used for any purpose, and some of the initial graduates
have used it to help with student debt.
The service began in August and is offered at 30 schools including Stanford and the Rhode Island School of Design.
Ms. Ensign also highlights 529 plan registries such as
www.Savingforcollege.com which tracks college-savings plans, GradSave (www.gradsave.com) and Give College (www.givecollege.com). Withdrawals from 529 savings plans are usually tax free if used for appropriate education expenses. Registry users should be aware of the user fees.
There are broader "crowdfunding" sites such as GoFundMe (www.gofundme.com), which charges a 5% fee on all donations and Indie-gogo. (www.indiego.com)
Social Finance or SoFi (www.sofi.com) raises money from a college's alumni to provide or refinance loans for current students and graduates and soon Common Bond (www.commonbond.com) will offer crowdfunding loans from accredited investors for MBA students of UPenn's Wharton School.
In discussing new creative ways to pay for college, there is also something called the Private College 529 which is a non-profit group run on behalf of its member colleges rather than a state run or state sponsored plan. This program was begun in 2003 and through it a parent contributes the current rate for a specific member school's tuition and mandatory fees. The student would then receive a credit for one year's tuition and fees that is guaranteed for 30 years regardless of tuition hikes. One caveat is that the student is not guaranteed admission to that school. Indeed, in Business Insider on October 13, 2012, Gus Lubin wrote an online article, "Admissions Offices: Here's What They Don't Tell You About Getting Into an Ivy League School". In it he reveals things discovered in an interview with a former admissions officer at Dartmouth College such as:
Legacies get a 'bump' though not as much as
recruited athletes.
It's much easier to be admitted during Early
(admissions). Even though most schools tell
you it's just as competitive, it's simply not true.
Of course, this is one former admissions person from one elite college but a lot of what is related is very interesting and worth a read. If a participant in the Private College 529 is not offered admission, a refund is issued with a rate of return that may not seem terribly attractive.
With all these "new" ways of funding exorbitant college costs, it seems the only thing college administrators are not getting creative about is reducing those costs!!!
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