NEW YORK (MainStreet)—Can prospective, students, scared off by student loan horror stories, crowdfund their way to a degree?
Piglt.com, a crowdfinding site that has taken on basic creative endeavors such as art, filmmaking, publishing and theater has rolled student loans on to its platform.
"Paying off your student loans and higher education costs by yourself is so 2012," said CEO Casey Wallace. "We believe it should be an entrepreneurial experience as well as a gateway to professional opportunities."
Piglt, which launched its beta version a month ago, divides its student loan universe into two sections: "Dreamers," who are looking for cash and "Believers" who show them the money.
Dreamers set their projects' funding goals and deadlines. Believers who want to sign on to a Dreamer's project pledge money with their credit cards. If the project meets its goals, Believers have their cards charged when the project deadline arrives.
Piglt seems to borrow from both Kickstarter and peer-to-peer lending, which lies outside the crowdfunding space. Rather than search for Dreamer solicitations, Believers can also start Believer funds on Piglt that accept applications from Dreamers. Kickstarter Spokesperson Justin Kazmark declined to comment.
Piglt allows funding campaigns for people who want money to go to school--known as tuition campaigns--and those intended to pay off existing student loans--loan campaigns. Tuition campaigns work toward a future goal—attending class. Those campaigns are all-or-nothing, with Believers getting full refunds for partial amounts raised. And the money doesn't go to the Dreamer--money raised by believers for tuition goes directly to the college. The borrower pays a servicing fee to Piglt and, in the cases of institutions that outsource payment, a 3% fee to the loan servicer disbursing funds.
Dreamers are charged 5% for fully funded student loan payoff campaigns and 8% loan payoff campaigns that fall short of their goal. They are allowed to keep the money from partially funded campaigns or return what they've raised.
"Over 75% of the campaigns we are seeing [on Piglt] are for existing student debt," said Wallace.
As far as how much a Dreamer can raise, the site encourages setting "realistic goals" on its FAQ page.
Based on Piglt's guidelines, the definition of higher education bleeds away from law school and four-year degrees and into the kinds of creative endeavors it also supports. So someone in the theater could crowdfund acting lessons that would support his or her craft, provided that the money went directly to the school or theater company giving the lessons.
>[?Outreach—and the sales and marketing piece—are done by Campus Brand Ambassadors, who work on commission to bring Dreamers and Believers into the fold, leveraging digital platforms such as Facebook, Instagram, Twitter and Tumblr. "The possibility of full time employment will be considered for those that stand out in the crowed," said Wallace.
While the concept is new, Piglt has some competition. allows crowdfunding students to attract investors who can claim up to 10% of their future earnings – reminiscent of schemes tried by non-bank student loan providers before the market for securitized student loans crashed five years ago. Zero Bound enables students to trade volunteer help for a break on tuition. San Francisco-based Indiegogo funds everything from soup to nuts as long as its school related.
--Written by John Sandman for MainStreet