“An investment in knowledge pays the best interest”– Benjamin Franklin
The interest, however, is not always in monetary terms. Education is the most empowering gift that can be given to anyone. In today's times where poverty, lack of basic healthcare and sanitation, access to education are real problems that we're still grappling with, crowdfunding can help and change the lives of aspiring students by funding their education.
Education crowdfunding assists students who can’t afford higher education without an education loan. It is increasingly being used in India to raise education funds from a large number of people across Socio-economic groups. Given the recent digital, social media disruption and internet penetration that we've been experiencing, India is all set to become a key player in the field of crowdfunding, joining the league of U.S., U.K. and China.
Crowdfunding has been successful in making inroads into traditional fundraising, thanks to the omnipresence of social media and digital disruption. The vast internet penetration across India, during the recent years, has helped online crowdfunding shift gears swiftly. Thanks to online crowdfunding, students can now reach out to people and raise funds with just a few clicks. It doesn't come as a surprise that crowdfunding is becoming a highly favored alternative to education loans that often come with hefty interest rates. Let us understand better as to why crowdfunding for education has the potential to be wildly successful in India at this juncture:
Enhanced opportunities with Crowdfunding:
Crowdfunding websites enable students to raise money from masses across economic groups, instead of relying on the compassion of a single well-off donor. People from all income groups can donate as much or as little as they like to help students out. Thus, by enabling students to reach out to bigger strata of society in a short span of time, it exponentially enhances the students' opportunities. Even though crowdfunding has recently been embraced by Indian students as a tool to fulfill their academic goals, there are many websites that assist students in raising their enormous college / tuition fee from friends, family, social network acquaintances and even strangers. In other words, it bridges the gap between students and donors.
Off late, online crowdfunding for education is garnering more acknowledgement and traction. This can be attributed to the fact that besides increasing a students' donor pool, it is safe, straightforward and efficient.
Education Loans are expensive:
Let's get real. Education loans disbursed by both public and private sector banks have an alarmingly high rate of interest that hovers between 9.5% and 13%.
While there are four types of crowdfunding - rewards-based, donation-based, equity-based and debt-based, most crowdfunding websites that raise funds for education are based on the donation model. In return, these websites charge students a fee of 5-10% of the total amount raised. Therefore, by being present at the right time on the right platform (crowdfunding website), students can fund their education without having to pay a hefty interest rate (as opposed to student loans).
Social Media Disruption and the Reach of Digital Platforms:
Given the recent digital & social media disruption coupled with internet penetration, even in the rural parts of India, crowdfunding websites have a bright future. The heightened popularity and accessibility of social media has made it easy for students to raise funds for their education instead of taking the aid of student loans. Not only does social media give students access to a larger number of donors, it is also the right channel for gathering funds by garnering more interest through impactful storytelling. As a platform, social media can be immensely personal, and thus, can appeal to and nudge people to help others realize their dream of higher education.
Talking about the role of social media in crowdfunding for education, Ms. Avi Keswani, Co-founder & Director of LISAA School of Design, says, "I think that crowdfunding for education is a phenomenal development that the internet has brought about. One can raise funds for their family member, friend or themselves using crowdfunding websites within a short span of time. It opens up opportunities for deserving students to access the enormous online community through social media. Many people want to contribute towards a cause, but believe that their contribution would be minuscule. Online crowdfunding addresses this misconception through social media and encourages donors to come together and help students reach their academic milestones.
Crowdfunding for education reinforces the belief that education shouldn’t be a privilege that is enjoyed by few, but should be accessible to people from all backgrounds. It is a tool that empowers students in their pursuit of an education and a bright future. While crowdfunding is still strengthening its roots in India, it cannot be denied that it is steadily gaining foothold. and revolutionizing the Indian education sector, while doing so. It leaves us with an inkling of the likelihood of kick starting (no pun intended) a revolution of grand proportions.