BuzzFund is a truly remarkable idea by a man hoping to revolutionize the way students pay for college or at least minimize their college debt. BuzzFund allows students to make personal profiles stating their college info, a little information about themselves, and how much their current college tuition costs. Donors can also create profiles and choose students to give e-scholarships to in an effort to help with tuition costs.
The Good: BuzzFund takes advantage of the already popular and successful business of crowd-funding/micro-lending (i.e. Kiva, LendingClub, Prosper.com). The main difference is that BuzzFund does not process loans. Rather, BuzzFund is strictly donation based. The website is well designed with an easily managed user-interface, and with the right direction and guidance could become an instrumental tool for some in their efforts to pay college tuition.
The Bad: Despite BuzzFunds positive message and good intentions, they have only come off to mediocre success thus far. There have been no shortage of students signing up to the website. As a matter of fact, students have managed to fill a pretty integral role in increasing membership by inviting their friends. The main issue that BuzzFund has at this point is a shortage of donor membership. While the release of the website a few months ago came at a perfect time for students facing credit crunches and tighter borrowing policies from the banks, the launch also came at a time when charitable giving hit an historic low due to the economic circumstances.
Looking Ahead: The fact that BuzzFund only allows users to donate could be a factor in its current mediocre success. Perhaps if the creators were to shift to a full micro-lending model where students were required to pay back the donors (even if there is not interest involved) it might push up donor and sponsor membership. Shifting to a micro-lending model is mutually beneficial for both lenders and students. The loans would come at a reduce rate (or no interest) allowing the lender to feel good about making a difference in the life of a student. For the student, the loans would hopefully push the student to work harder and perform better knowing that they must repay the lenders. $25 as a recurring loan can have much more of an impact than a one time $100 donation.
BuzzFund is a well made website with a great administration. The students are friendly and heplful. With a little promotion, a healthier economy, and perhaps a slight change in business model – BuzzFund may make a full-force comeback making waves across the whole university tuition and financial aid industry.
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