By Grace Austin
Crowdfunding has been used for nearly every avenue that one could possibly think of: small businesses, nonprofits, and even movies. Now the phenomenon has reached higher education. A new crowdfunding website, Angeldorm, seeks to offer the first major online fundraising site connecting students to donors.
Student loan debt is a fact of life for most people in their twenties, thirties, and even forties, especially those who attended an expensive or out-of-state school. Angeldorm.com allows students to seek donors without payback requirements. Contributions can help pay for tuition, fees, books, and housing costs. Donor contributions start at $25 and move upwards to $250 and more.
Students create “dorms” where they share goals and plans on social media like Facebook and Twitter. Funds are then sent to 529-college savings accounts backed by Fidelity Investments.
The start-up was created by investment banker Scott Baxter, previously of Citigroup and J.P. Morgan. Baxter’s son, now a senior in high school, inspired the Angeldorm concept as he began his college search.
“The cost of these colleges was really driven home to me, and how many families can’t afford it. I realized that markets had evolved to a point so where you could combine crowdfunding with social media to help kids tap their social networks. A village can help these kids can go to college,” says Baxter.
After the initial idea, Baxter then researched how to establish credibility and involve universities in the process. They are currently partnered with University of Texas at Austin, Houston Community College, the University of Utah, and Weaver State University. They are hoping to expand these partnerships to more institutions.
“The universities really welcome it because they want to help their students graduate and without a ton of debt. And it’s credible because we’re cutting the checks directly to the university,” relates Baxter.
Unlike scholarship programs, funds can be accessed immediately and there are no minimum requirements or continued requirements for donations. Students need to only create their “dorms” and the money they raise must go towards educational-related expenses. Volunteer work is also encouraged.
“The reality is unfortunately many kids don’t qualify for scholarships or can’t get them, or the scholarships they do qualify may only be used for tuition or a portion of fees—it may not touch housing, books, or food vouchers. We feel every bit helps, so whether its Angeldorm combined with scholarships, we encourage it all,” says Baxter.
Angeldorm plans to expand to all college students globally, while initially focusing on English-speaking countries of the U.S., U.K., Canada, Australia, New Zealand, and India.