Education start-up offers new way for students to pay for college

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Education start-up offers new way for students to pay for college
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It’s no secret that the cost of college isn’t cheap — and unfortunately, it’s getting worse.

The average annual cost of a four-year college for the 2015–2016 school year reached $32,405 at private colleges and $9,410 for state residents at public colleges, according to the College Board. And tuition continues to increase. Just five years ago in 2010, the annual cost of public college was $1,100 less than it is today.

Ideally, students should avoid borrowing whenever possible, but depending on your specific situation, getting a scholarship or working to pay for college isn’t always ideal. Plus, prospective students may not know how big of a scholarship they will be awarded until after college application deadlines. Then even if you do get a scholarship or financial aid, there’s never a guarantee of how much money you’ll actually get, if any.

Enter Raise.me — a new option that makes finding and earning college scholarships easier. 

Read more: 9 ways to pay for college without student loans
 

A new way to earn scholarships

One big problem with the current system of how future college students apply for and receive scholarships is that the process typically isn’t complete until after students need to decide not just where to apply, but where they will attend school after high school.

That’s the problem a new education start-up wants to solve.

Raise.me is a new scholarship program that allows students to earn micro-scholarships at universities much earlier — allowing them to better plan their college journey (and funding). 

Co-founder and CEO of Raise.me Preston Silverman says,’The problem we’re seeking to solve is that every year in the US, we’re awarding billions of dollars to help students pay for college — but usually not until the end of their high school career, in the second semester of senior year.’

He also says, ‘That’s after they’re supposed to have decided if they can afford it. For many students, the money is awarded too late to impact where they choose to apply or whether they apply at all.’

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Read more: 5 things to know about student loans

How it works

Colleges and universities can register with Raise.me for a yearly fee to cover the site’s costs. They are then asked to answer these questions: 
 
  • Who is eligible to earn a micro-scholarship at their institution?
  • Which achievements merit a micro-scholarship? 
  • How much is each achievement worth?
 
Students can register for free at Raise.me by entering some information about themselves such as name, high school, birthday, ethnicity, income and other info, and then Raise.me will find any scholarships for them based on this information. You must be attending a high school in the U.S. to register. 
 
In addition, students can earn scholarships based on achievement. 
 
Examples of achievements that schools reward: 
  • Between $25 and $2,500 (depending on the school) to students who take an Advanced Placement (AP) or International Baccalaureate (IB) program
  • Between $25-$1,000 for a high grade
  • Between $20-$3,000 for taking two or more foreign language classes
  • Between $50-$1,500 per year for taking on a leadership role in an extracurricular or sport

These are just a few examples of what prospective students can earn. Schools set a minimum GPA for students who are eligible to receive scholarships and some colleges also require that profiles be verified by a guidance counselor. 

These scholarships are guaranteed, so long as a student should attend the university providing it. But it should be noted that admission to a particular college or university is not guaranteed. Students need to apply separately to the college or institution they wish to apply for, and if a student is accepted to a school that promised him or her a certain amount of scholarships through Raise.me, the school commits itself to providing that scholarship. 

Read more: New ways to pay down student loan debt

A commitment to lower income families

Raise.me is committed to helping students who otherwise would not be able to afford college. ‘We’re a social enterprise company, so we’re very focused on servicing students from lower income backgrounds and first generation students,’ Silverman says. ‘Colleges can determine who they want to earn scholarships, and many partners will say only students at low-income schools. Some make it available to everyone.’

Over 130 colleges offer or are in the process of getting set up on the platform, including Colby College, Oberlin College, Carnegie Mellon University and Penn State, and the maximum amount of aid available is $80,000. 

‘That’s important because we don’t want students in a situation where they receive a lot of aid for their first year and in subsequent years aren’t receiving as much aid,’ explains Silverman. ‘That has been shown to be a major cause of students dropping out or taking on major amounts of loan debt.’

Raise.me won $120,000 from the College Knowledge Challenge contest, sponsored by the Gates Foundation and Facebook, and also raised $4.5 million during a Series A funding round in 2015. Almost half of the 60,000 students who have registered for Raise.me come from low-income families. 

What’s next for Raise.me? The organization is working on setting up platforms to work with corporations and foundations, as well as building awareness to help finance education for students across the US. 

Read more: 5 ways to save money on your college degree

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