Andrew Levin owes the bank $26,000 in student loans, and he'd like you
to help him pay it off.
Should you be inclined to reduce his bill, Levin, an Oakland musician and graduate of the University of Southern California, would be pleased to teach you to play guitar, bass, electronic drums or piano. Or he'd teach you to sing or to program a synthesizer. Maybe all of the above -- if you're generous.
It's crowdfunding for college costs. And websites for that purpose are proliferating at a rate that rivals the rise in interest on student loans.
"If you'd like to help people out who are bogged down by student debt, I would really appreciate your help," said Levin, 23, practicing his pitch for a new website called Piglt -- think piggy bank -- specifically to raise money for tuition and student loan debt, which hovers around a $1 trillion nationally among 37 million borrowers.
Crowdfunding is the direct appeal of one to many for help paying for something. The idea is as old as passing the hat. But the Internet has inspired entrepreneurs to make it easy for donation seekers to make their case, set a financial goal, and work their way toward it by a deadline.
The sites are tapping into a new and seemingly limitless clientele: the millions of needy students and former students around the world who need cash for college bills.
Some offer all-or-nothing deals, in which donation seekers get no money if they fall short of their fundraising goal. Other sites say it's OK to keep what you get. Most take a fee.
Levin's path to Piglt began with his childhood dream of enrolling in one of the world's great guitar programs, at USC, where yearly tuition, room and board cost about $60,000.
He managed it with financial aid and student loans.
Now, a year after graduating, Levin will hold out his hat on Piglt. The site is expected to go live this week with eight "Dreamers." That's Piglt jargon for people like Levin, who hope complete strangers will ease their financial pain in exchange for lessons in cooking, music, art, video editing, business plans, social media -- or almost anything else.
"I wanted to allow each person to use the skills they just paid a lot of money for to benefit themselves," said Casey Wallace, who co-founded Piglt a year ago in Los Angeles.
His competitors are also getting into the needy-student market:
-- Pave and Upstart let students use crowdfunding to attract tuition investors, who stake a claim in 7 to 10 percent of their future earnings.
-- Zero Bound, not yet live, will let students trade volunteer work for help with loan debt and tuition.
-- Indiegogo, a crowdfunding company in San Francisco, is attracting students who hope to raise cash for college extras: A UC Berkeley trip to Italy. A used car to get to college in Santa Rosa. A campus club for Hmong students at Cal.
-- Also in San Francisco is Kiva, a microfinancing nonprofit that last year began helping students crowdfund tuition loans in Africa and South America, where financial aid and student loans are rare. Students have a decade to pay the money back at 2 to 5 percent interest.
'World of possibility'
"College is just out of reach for far too many students, no matter how bright and hardworking they are," said Michelle Kreger, a Kiva director. "Crowdfunding tuition loans open up a world of possibility for these students and break the cycle of generational poverty."
But how well does crowdfunding work?
At Indiegogo, a San Francisco choreographer raised more than $5,000, a third of what she needed to attend a dance program in Vienna, said Danae Ringelmann, the company's co-founder.
Other money-seekers have exceeded their posted goals -- including the family of a man executed two years ago in Georgia that is trying to raise money for his nephew's college tuition. Contributions stand at $7,413, prompting the family to double the goal to $8,600.
Not all students meet their goals. Bryan Sieber of Berkeley raised just $255 of the $2,000 he requested for the UC Berkeley program in Italy. He still made his flight, according to the thank-you he posted.
In Kenya, 20-year-old Wambulwa Ayub had better luck raising money.
"I was raised in an orphanage in Nakuru after my mother became chronically sick," Ayub posted on Kiva. He's seeking $14,625 for tuition at Kenya's Strathmore University, where he hopes to earn a bachelor's degree in business information technology.
"My father died when I was 4 years old," he wrote. "I have three brothers and four sisters in total. My mother is a peasant farmer but unproductive due to her persistent sickness."
In the first six days since Ayub posted on June 20, lenders pledged $1,100, or 7 percent of his goal. One day later, the figure more than doubled, to $2,779, and now stands at $5,850, or 40 percent of his goal.
Heartrending stories like Ayub's can intensify the competition, especially for guys like Levin, who grew up in tony Palo Alto and already has a bachelor's degree in music. Still, Levin's family is not wealthy, and he is a struggling musician. So he wrote a catchy jazz tune called "All the Things I'd Do," about being saddled with student loan debt, that he'll sing on his Piglt crowdfunding page.
"I hope one day I'll finally be set free. And I hope one day this debt will be relieved ... When I'm dreaming all that I can see is all the things that I'd do ... such a shame we're stuck here payin' when you think of all that we could do ..."
"This song is about me, but it resonates with a lot of people," said Levin, whose debt includes some federally subsidized Stafford loans.
The interest rate on those loans doubled on July 1, from 3.4 to 6.8 percent, after students spent months chewing their nails as Congress dithered along party lines. Republicans wanted to impose a variable rate on the interest, which Democrats said would be even worse. Their proposal was to postpone by one year the deadline for doubling the rates in hopes of reaching a compromise.
Meanwhile, Levin is pinning his hopes on Piglt.
Wallace, the co-founder, graduated debt-free from the U.S. Air Force Academy, which charges no tuition to those who serve in the military.
By contrast, his wife has student loan debt approaching $100,000 after graduating from an Ivy League university and a private law school, he said.
And so, Piglt was born.
For crowdfunders seeking tuition help on Piglt, the company says it will take a 5 percent cut if the goal is reached. PayPal will get 3 percent. The website automatically increases fundraising goals by 8 percent to accommodate those fees.
But if tuition-seekers fail to make their goal, all pledged transactions are void and no money will be allocated, Wallace said.
Crowdfunders seeking help with student loans can do it the same way -- or they can try a different strategy and keep all the money raised even if it falls short of the goal. The trade-off is an 8 percent fee to the company if the goal is missed, and 5 percent for successful campaigns.
Wallace called it an incentive to work harder.
"We want you to be successful," he said, adding that Piglt verifies enrollment claims of all donation-seekers and will send donations only to a college or bank, not the student.
The $50,000 that Wallace and co-founder Vidya Chokkalingam started the company with is now just some change in the piggy bank, he said.
"We've definitely been bootstrapping it," he admitted. "I haven't been paid at all."
So they need something creative to survive the first year, Wallace said.
They're going to try crowdfunding.
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