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Crowdfunding College: Another Way to Save

Education costs keep rising. Gifts from friends and family can help.

Father playing with son while son wears graduation cap.

You’ve heard it a million times: College costs are skyrocketing. It’s important to start saving early—and finding creative ways to pay for college, like crowdfunding, can help.

But when it comes to something that’s years away, it can be hard to sock away real money and put a college savings plan into action. It’s time to get realistic about how much you need for your child’s education, the best ways to save and how to avoid debt down the road.

College Costs Are Rising … But by How Much?

Even considering the price differences between two- and four-year public and private options, the costs can quickly get overwhelming. 

Sticker Shock: Prices for One Year of College

Average Annual Tuition and Fees, Plus Room and Board

Public Two-Year

In District

Public Four-Year


Public Four-Year


Private Nonprofit


2022-2023 School Year





% Change From Previous Year





Source: College Board Trends in College Pricing and Student Aid 2022.

How Are Most Families Paying for College?

Families use many different ways to pay for college, including current income, savings, scholarships or grants and loans. For the 2021-2022 school year, 18% of funding came from parent and student loans, piling on debt for families and young adults.

A bar chart titled,  "How a Typical Family Pays for College".

Source: How America Pays for College 2022, Sallie Mae and Ipsos. 

Another Way to Save: Crowdfunding for College

Crowdfunding has become popular for a variety of expenses. Small amounts from lots of people have the potential to grow over time.

Family members and friends may already be giving money for holidays, birthdays and other milestones. When you add up these gifts, you’ve got another tool to save for college.

What if you replaced a portion of your usual gift amount with contributions toward college savings? And what if your friends and family did the same?

Keep in mind that crowdfunding for college may not come with the same tax-advantaged benefits as a 529 plan. Luckily, these state-sponsored savings tools are also making crowdfunding for education easy.

Don’t have a 529 plan yet?
Learn about the benefits of 529 plans.

An Easy Way to Crowdfund Your 529 Plan Account

With the rise of crowdfunding has come specific online tools catered to raising money for school. Students can invite friends and family to send cash gifts via online gifting platforms in lieu of traditional presents for birthdays and other celebrations.

Many state 529 education savings programs make it easy to contribute through an online contribution, gift card or mailed-in check. You can direct family and friends to a personalized online gifting page where they can contribute money straight from their bank accounts. And best of all, there are no fees for many of these gifting services.

For example, the Ugift® feature of Kansas’ Learning Quest® 529 Education Savings Program allows you to share a unique gifting code with family and friends so they can transfer funds directly to the account.

Rethink the Wish List: How to Ask for College Money

For the “I never thought of it” crowd: Make sure they know college savings is a real, welcome gift option.

For the “I want to give a real gift” crowd: Suggest that money for college be a portion of a regular present instead of either/or.

For the “Kids have too much stuff” crowd: This is the perfect gift to avoid adding more toys to the pile.

Other Creative Ways to Pay for College

Students and parents don’t have to stop at loans, grants or cash to pay for schooling. Consider other creative ways to pay for college:

  • Co-op schooling. Some colleges offer co-op, or cooperative education, opportunities to their students, giving them hands-on, paid job experience while earning their degree. Whether full time or part time, this on-the-job experience means students can earn money to help cover the cost of education.

  • Military tuition assistance. Active duty, National Guard and Reserve component service members are eligible to have up to 100% of their tuition expenses covered.

  • Specialty scholarships. Scholarships don’t always have to be education-based. Cultural organizations or hobbyist groups also offer scholarships for students. Anything from being a twin to competitive yo-yoing may help contribute to funding for school.

  • Other investments accounts. A CESA, also known as a Coverdell Education Savings Account, is a tax-advantaged account that helps parents save for their children’s education, as long as they’re under the age of 18.

More College Saving Strategies

College Saving for Older Students

If you’re returning to or attending college for the first time later in life, you likely will shoulder most of the costs yourself.

However, opening a 529 plan and contributing while you’re attending school can still provide tax benefits. Crowdfunding can work for you, too. You also can request that friends and family contribute to your account for birthdays and holidays.

College Funding as an Estate Planning Strategy

Giving to a loved one’s 529 plan can be a savvy financial strategy.

An accelerated gift, also called “superfunding,” gives your money the potential to compound and grow tax-deferred for education expenses. You can contribute up to five years’ worth of gift tax exclusions to a 529 plan.

For 2023, someone can contribute up to $85,000 to a 529 plan without triggering gift taxes.

RMDs as College Contributions

Required minimum distributions (RMDs) from retirement accounts are a great source of possible college savings.

Retirement plan holders need to start taking money out of these accounts starting at age 73. If your loved one doesn’t need any or all the money, helping with college savings can be a great option.

Small Gifts Could Add Up to Big Dreams

Crowdfunding is a creative way to pay for college and a good way to engage your child in the college planning process. Together, you can see how gifts from family and friends—no matter how big or small—help make college dreams a reality.

A Gift for Their Future

Help family and friends give the gift of college savings. Get started today.

No additional gifts can be made to that beneficiary over the next four years after the year in which the one-time gift is made.

If the donor of an accelerated gift dies within the five-year period, a portion of the transferred amount will be included in the donor's estate for estate tax purposes. Consult with a tax advisor regarding your specific situation.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

The availability of tax or other state benefits (such as financial aid, scholarship funds and protection from creditors) may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors.

Gift contributions received by the Learning Quest Plan will be invested according to the allocation instructions on file for the account at the time the gift contribution is transferred into it. Gift contributions transferred into the beneficiary’s account shall be governed by the terms and conditions of the Learning Quest Handbook. There may be tax consequences of gift contributions invested in a 529 account. The Plan reserves the right to invest gifts received into the beneficiary’s account regardless of whether the account has been previously closed.

Before investing, carefully consider the plan's investment objectives, risks, charges and expenses. This information and more about the plan can be found in the Learning Quest Handbook, available by contacting American Century Investment Services, Inc., Distributor, at 1-800-579-2203, and should be read carefully before investing. If you are not a Kansas taxpayer, consider before investing whether the beneficiary's or your home state offers a 529 Plan that provides its taxpayers with state tax and other benefits not available through this plan.

As with any investment, it is possible to lose money by investing in this plan. The value of your Learning Quest account may fluctuate, and it is possible for the value of your account to be less than the amount you invested.

Notice: Accounts established under Learning Quest and their earnings are neither insured nor guaranteed by the State of Kansas, the Kansas State Treasurer or American Century Investments.

Administered by Kansas State Treasurer Steven Johnson
Managed by American Century Investment Management, Inc.
American Century Investment Services, Inc., Distributor