When Kelli Space graduated from Northeastern University in 2009 with $200,000 of student loan debt, she panicked. Given that she had an entry-level office manager job that didn’t pay much, Space knew that it was going to be tough to pay back that debt on her own.
But instead of deferring her payments—or not paying them at all, like many grads end up doing—she started a crowdfund, which is the practice of funding a project or venture by raising small amounts of money from a vast pool of people online.
“In total, I received $13,000 from strangers around the world,” she says. And although that amount only made a small dent toward paying off her debt, it had a big impact on her career trajectory—the experience inspired Space and three friends to start Zero Bound, a company that helps students and graduates crowdfund their own student loan debt in exchange for community volunteering.
Space has not one but two lofty goals with Zero Bound. “We hope to use the trend of crowdfunding to not only help a generation pay off their debt, but also increase volunteerism among an age bracket that actually volunteers the least,” she says. “And, to that end, I believe that crowdfunding can be a largely beneficial way to raise the funds to make that happen.”
Crowdfunding: It’s Viral … and Personal
Space isn’t alone in her thinking. Since 2011, crowdfunding efforts have more than tripled, and current campaigns are projected to raise more than $5.1 billion worldwide in 2013.
But what started out as a way to enable businesses and individuals to raise money for creative endeavors without relying on such traditional financing sources as banks—take the indie Veronica Mars Movie Project, which raised over $5 million on Kickstarter in just 30 days—has morphed into a means for literally anyone to ask for money … for literally anything.
“Crowdfunding is definitely branching out into multiple areas, including personal causes,” says Ellen Sperling, cofounder of crowdfunding site YouveGotFunds.com. And, by personal, we’re talking about everything from surgeries to honeymoons. Why, you ask? “It’s partly because the costs for many of these regular items have skyrocketed,” she says. “Medical fees are through the roof, and even if you have health insurance, they don’t always cover certain medications and procedures, like fertility treatments.”
The same applies to financing higher education. “Why would college students want to graduate owing $150,000-plus in loans,” Sperling says, “if they have family, friends and possibly community members who can help, enabling them to start their careers in a better place?”