British student Thomas Ankin works four jobs while studying history at Goldsmiths University in London. The 24-year-old has been accepted onto a £6,000 ($9,000) master’s degree due to start in September, but is daunted by the prospect of paying for it.
And unlike many millennials, turning to his family for financial support is not an option.
“I came through the care system, I can’t call up home that isn’t going to happen,” Ankin told CNBC in a phone interview. “The only way for me to do it is part time work, but it’s a master’s so I need to be focused on it more.”
Faced with a massive tuition fee bill, Ankin launched a crowdfunding campaign to raise £4,300 on GoFundMe last November and has so far raised £1,247.
“I was quite taken aback with how well it has gone. I don’t want to raise all the money, but the more you have in that pot when you start, the more time you can focus on what you want, rather than multiple jobs to keep yourself afloat,” he added.
Growing student debt
Tuition at U.K. universities was hiked from a maximum of £3,375 a year to £9,000 a year in September 2012. Perhaps unsurprisingly, this caused a drop in the number of students from 2.49 million students in 2011/2012 to 2.29 million in 2013/2014, according to the Higher Education Statistics Agency.
In the U.S., an in-state college education at a public school costs on average $9,139 a year, and rises to $31,231 at a private non-profit college.
It comes as student debt levels in both the U.K. and U.S. have ballooned. Outstanding student loan balances stood at £62.2 billion in the U.K in the year to March 2014, the country’s Student Loans Company said. In the U.S., meanwhile, that figure stood at a whopping $1.16 trillion at the end of last year, according to the Federal Reserve Bank of New York. (Tweet this)
As a result, a growing number of education-focused crowdfunding platform have popped up to service students wanting to go to university without building up massive debt.
One of those is EdAid, a crowdfunding platform due to launch this summer, which claims it can save students around $50,000 and nine years of repayments.
Students on the platform can receive financial backing from anyone, and EdAid then takes all of these donations and packages them into one interest-free loan. The student then repays 10 percent of their monthly salary starting from the April after they graduate until all of their supporters have been paid back.
This model is different from some other education crowdfunding platforms, where the backers are not repaid.
“We have had charitable giving, equity giving and this is the last piece of the puzzle for people to make social impact investment in education,” Tom Woolf, founder of EdAid, told CNBC by phone.
“And with the awareness of the debt level that students have, the education sector is one that has come into people’s radar to invest in.”
EdAid is not the only company in this space. Pave works in a similar way to EdAid, and Scholar Match connects under-resourced students with donors. There are also a number of platforms which let students at universities fund campaigns such as sports events or projects, such as Hubbub, IncitED and Piglit.
But crowdfunding education has garnered a lot of negative press. Emily-Rose Eastop raised £26,569 via Hubbub to undertake a master’s in Cognitive and Evolutionary Anthropology at Oxford University last year, but was criticised by some on her fundraising page.
“There were rape threats and there were death threats. You could say it’s unfair I’ve been given this money and other people aren’t. But you could also levy that complaint at scholarships too,” Eastop told CNBC by phone.
“Enabling people like me who have a lot to give and want to get qualified and get to a position where they can build a bit more influence is a good thing for the future of the planet,” she added in response to the critics.
Jonathan May, CEO of Hubbub, admits that students can find it difficult to fundraise for themselves.
“It’s really hard to do. You need a very specific skill set to raise money and you need to understand how to raise money,” May told CNBC by phone. “How are you going to convince people?”