What are the risks of relying on donors to pay off loans?

Relying on donors to pay off your student loans is risky because there is no guarantee that anyone will contribute money to you. Celebrity help is rare, and crowdfunding to raise money can be difficult as it depends on the size of your network and the generosity of the people who read your story. However, there are loan repayment and forgiveness programs you can apply to, if you are eligible. And you can check with your employer to find out if they offer student loan repayment help through an educational assistance program.

How much of my student loan can be paid off by donors?

A donor can pay off your entire student loan at any time. Some gifts may be taxable, however, for you or the donor, if they exceed a certain limit. Check with a tax professional about the specifics.

Are donations to pay off student loans tax-deductible?

If a donor pays off your student loans, they may need to pay taxes on the money, which is considered gift money. It depends on how much they donate: According to the IRS, the gift tax exclusion for 2024 is $18,000 and $19,000 for 2025. If a donor gives more than that, they will owe taxes on the excess amount. You, as the recipient, generally should not have to pay taxes, though you will need to file Form 709 with the IRS. You may want to consult a tax professional about your specific situation.

Is crowdfunding a good way to pay off student loans?

Crowdfunding may help you raise money to help pay off student loans, but the results can be unpredictable. How successful you are depends on such factors as the size of your network and the generosity of donors. There may also be processing and transaction fees you’ll need to pay. It’s wise to have a solid backup plan and not rely solely on crowdfunding.

Can social media help me find donors for my student loans?

You can use social media to get out the word about your student loan repayment fundraising goals. Some crowdfunding sites like Paidly make it easy to share your story across multiple social media platforms.

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