The young woman, who is using the name Natalie Dylan for privacy reasons, lives in San Diego but it willing to do the deed with the winner of the online auction at the Moonlight Bunny Ranch in Nevada.
"I don't think auctioning my virginity will solve all my problems," she told celebrity television show "The Insider" on Wednesday. "But it will create some financial stability. I'm ready for the controversy, I know it will come along. I'm ready to do this."
"We live in a capitalist society. Why shouldn't I be allowed to capitalize on my virginity?" she added.
Dylan said she hopes the auction will bring in at least $1 million.
Dylan was turned down by eBay, but the Moonlite Bunny Ranch will run the auction. Dylan's sister reportedly works at the brothel and is saving to pay of her own college debts.
Dylan has an undergraduate degree in women's studies and wants to earn her master's degree in marriage and family therapy.
She has already taken a polygraph test to prove her virginal status, and said she is willing to undergo physical tests for additional proof.
A date for the auction was not immediately available.
The announcement has sparked an online debate among bloggers who question the morality of Dylan's decision.
"Maybe this is the conservative in me coming out, but this seems so wrong," wrote one blogger, Mike. "Isn't this prostitution?"
But Dennis Hof, owner of the Moonlight Bunny Ranch, has voiced his support for Dylan.
"I think it's a tremendous idea. Why lose it to some guy in the backseat of a Toyota when you can pay for your education?" he told reporters.