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Kentucky Students' Start-Up Tackles College Costs Through Crowdsourcing

Ervins Strauhmanis/Creative Commons

Michael Lewis got fed up seeing his peers struggle with student debt—so he decided to do something about it.

Lewis, an 18-year-old from Louisville, and a small team of his fellow students at the University of Kentucky are preparing to launch a start-up that takes direct aim the nationwide issue of student debt.

The start-up, called FinanceU,will give prospective college students a platform to fund their own education through crowdsourcing.

"FinanceU (will be) available to any student who seeks to or is already trying affording higher education," he said.

To use, FinanceU students will have to create an online profile, complete with hobbies, skills and interests. Then, the start-up will employ a three-tier crowdsourcing model.

The first tier will focus on helping users raise money for college from friends and family, Lewis said. The second tier will aim at alumni, corporations and local businesses for support. The third tier will focus on global involvement, he said.

He will launch a Kickstarter later this month to help fund the start-up. He is expecting to launch FinanceU to the public in the fall.

Students from Kentucky’s eight public universities and college took on an average of about $26,000 in debt upon graduation in 2013, according to the Council on Postsecondary Education.

FinanceU will be insured by the FDIC, Lewis said. It will also offer a secure transfer system that will directly deposit money raised by an individual student to a college or university upon admission.

One catch, he said, is that a student will be required to show proof of admission before the funds are transferred.

And if a student decides not to go to school or drops out, the money can be withdrawn from the secure account, Lewis said. If the student doesn't raise the full amount needed, that's OK, too.

"Any money is better than no money," he said.

Lewis said he isn't himself in debt; he has scholarships and he's dipping into an account his family began building years ago specifically for college. But he said he expects to fall into debt if he pursues an advanced degree.

He called student debt a societal ill. That belief is similar to sentiments voiced last month by U.S. Education Secretary Arne Duncan during a visit to Louisville.

"The cost of college is a real barrier, a real impediment," he said.

Lewis said he hopes to to break that barrier for, at least, some students.

But the start-up program will "not be in the business" of helping students pay off past college debt, Lewis said. The idea instead is to provide students a program to help them pay college costs as the bills come in.

Nearly 700 students have expressed interest in taking part in the start-up, Lewis said. He expects as many as 3,000 to take part in the FinanceU by the time it launches.

Jacob Ryan joined LPM in 2014. Ryan is originally from Eddyville, Kentucky. Email Jacob at jryan@lpm.org.