Students Are Using Their Loan Money To Buy Cryptocurrency, Study Says (fastcompany.com)

Student loans aren't just for buying textbooks, No. 2 pencils, and apples for bribing teachers anymore. According to a recent survey, as many as one in five college kids may be using their student loans to cash in on the cryptocurrency craze. From a report: The Student Loan Report surveyed 1,000 current college students with student loan debt about whether they were asked whether they used their student loan money to invest in cryptocurrencies like Bitcoin and found that 21.2% of them have Sallie Mae to thank for their cryptocurrency investment. Many students borrow a little more money than is necessary to pay for tuition and books, according to Student Loan Report. The leftover cash is typically used for college living expenses, but some wily students think that investing in Ethereum or Ripple may be a better investment than a bachelor's degree in comparative English literature.

Comments

Investments only go up right?

[jellomizer]

It is not like some high volatile investments crash and burn just as fast as they had skyrocketed.

Re:Investments only go up right?

[Anonymous Coward]

They're not investing - they are speculating (gambling).

And they and many folks who buy stocks do not understand the relationship between risk and return.

With all these years of too cheap money, speculating fever is in all asset classes and it never ends well.

And what these kids don't seem to realize is that when they lose, they are on the hook for a student loan that they will be stuck with. The only way to get out of paying a student loan is to die.

Re:Investments only go up right?

[rickb928]

Perhaps they opened a wallet and funded it so they could buy something with Bitcoin.

That's an 'investment', yes, but not so simple as an Investment...

Re:Investments only go up right?

[blackomegax]

Most of us want to die anyway, and it's not like defaulting on it will *truly* harm you. Just a little bad credit.

Re:Investments only go up right?

[arth1]

The only way to get out of paying a student loan is to die.

This is not true. Emigrating usually works too.

Re:Investments only go up right?

[dmitrygr]

Oh, they realize it. Why do you think they are campaigning for college student loan forgiveness?

Re:Investments only go up right?

[Anonymous Coward]

no that is NOT an investment.

Re:Investments only go up right?

[Anonymous Coward]

Hah. These are the worst of the government loans and private sector combined. If you default:

You cannot renew your driver's license.
You cannot buy/sell a house.
You cannot get a trademan's license.
You will be laughed out of any security clearance application.
You won't be able to get a meaningful job, as -everyone- checks credit.
You won't be able to get a decent apartment.
You won't be able to get a vehicle.
The government will garnish your wages (and I'm not talking about adding some parsley... I'm talking 25% of your income... gone, for a LONG time, and with the interest rates for student loans going up to 30% for punitive rates, you will not be paying those suckers off anytime soon.)

If you want to live in a decrepit van at Slab City, fine, default on them. However, my biggest recommendation is to not get them in the first place. Go to another country that values education, like EU nations, whose government is immune to corruption, and actually values their citizens, then come back with your degree.

Re:Investments only go up right?

[bluefoxlucid]

It's been a stage 3 bubble for a while. Stage 3 can go up and up for the next 30 years, or it can go to $0 and die in the next 30 minutes.

Re:Investments only go up right?

[Solandri]

Comment was modded funny. But several foreign students I met in college and grad school racked up thousands or tens of thousands of dollars in credit card and loan debt, then simply left the country when they graduated. They never planned to stay in the U.S. or visit again after graduating, and never intended to pay these back.

Re:Investments only go up right?

[rickb928]

*whoosh*

Re:Investments only go up right?

[Lanthanide]

Most countries will fund tertiary education for their own citizens.

Foreigners get charged the full rate, to stop people trying to do precisely what you suggest.

Re:Investments only go up right?

[Lanthanide]

'Never' is a long time. Kind of difficult if you get a job at a company and they need to send you on a business trip to the US. Or even a business trip that transits the US.

Re:Investments only go up right?

[HornWumpus]

Some countries will fund college education, for their citizens that:

Made good grades in high school.
Continue to make good progress towards a meaningful degree.

No nations fund school for all, trade school perhaps.

Re:Investments only go up right?

[rogoshen1]

whose government is immune to corruption, and actually values their citizens

Surely you jest.

Re:Investments only go up right?

[dcollins117]

Well, they're young and still at the stage where they think they are invincible. They mistake they make is using student loans which can't be discharged in bankruptcy. When they get older and wiser they'll use credit cards :)

Re:Investments only go up right?

[magarity]

Most countries will fund tertiary education for their own citizens.

Care to check on your definition of "most"? I think you mean "European".

Re:Investments only go up right?

[fahrbot-bot]

The only way to get out of paying a student loan is to die.

Unless your parents (or someone else) co-signed it ... After daughter’s death, parents plead for forgiveness of her $200K student-loan debt, then they're stuck with it. (Probably not surprising, but worth mentioning.)

Re:Investments only go up right?

[mspohr]

Germany,
France,
Finland,
Sweden,
Norway,
Argentina,
Iceland,
Denmark,
Brazil,
Turkey,
Scotland,
Greece,
Austria,
Belgium
(Results from just a few minutes and Duck. Some of these countries have small fees but none of them require "progress".)

Re:Investments only go up right?

[arth1]

'Never' is a long time. Kind of difficult if you get a job at a company and they need to send you on a business trip to the US. Or even a business trip that transits the US.

Not paying your student loan isn't under the criminal code, so cops won't run to a judge to get an arrest warrant if you show up.

Re:Investments only go up right?

[arth1]

I was thinking about those emigrating, not those not immigrating.
People who emigrate sometimes find that economical obligations they have in their old country no longer are enforceable. Outstanding fines and taxes are sometimes covered by agreements between countries, but things like student loans are unlikely to be.

Re:Investments only go up right?

[HornWumpus]

Nonsense.

If you aren't making grades and progress towards your degree in Germany, you are bouncing down the stairs of the university. You obviously phrased your search in a stupid way.

Re:Investments only go up right?

[martinX]

New York, London, Paris, Munich.
Everybody talk about pop muzik.

Re:Investments only go up right?

[martinX]

They were probably expecting her to live and pay it pack. Takeaway I get from this is to have all signers on a loan to take out life insurance that you can access in the event of their death. Should be an option on the loan.

Re:Investments only go up right?

[arth1]

But taking out debt without ever intending to pay it is known as fraud.

People may have the best of intentions when taking out a loan. In which case they're only defaulting, which is not something that normally warrants a criminal arrest or extradition.

Re:Investments only go up right?

[legojenn]

Some things never change. I remember back in 1992, there was a dude in our dorm who bet his student loan on the new at the time sports lottery. I think that he bet on hockey games. He got called Pete Rose for a year for that dumb move.

Re:Investments only go up right?

[Tangential]

As long as they retain the liability to have to pay it back (regardless of financial state or bankruptcy) then its not that big an issue.

Re:Investments only go up right?

[Joce640k]

some wily students think that investing in Ethereum or Ripple may be a better investment than a bachelor's degree in comparative English literature

I don't see any conflict in that assertion.

(or why that makes them 'wily')

Re:Investments only go up right?

[arglebargle_xiv]

My feelings as well. Mind you that's mostly because almost anything is a better investment than a degree in comparative English literature.

Re:Investments only go up right?

[plopez]

or STEM degrees these days.

Re:Investments only go up right?

[arth1]

You still have to apply for a B1 Visa when visiting the US for business reasons.

Not if you emigrate to a country that allows dual citizenship, which the US also does. Then you travel to the US as a US citizen, no visum required, I should think?
If you renounce your citizenship, you may get problems obtaining a visum anyhow.

Re:Investments only go up right?

[Lanthanide]

Obviously you didn't read the actual thread. We're talking about foreigners coming to the US and studying, racking up debt and leaving.

They aren't going to be US citizens, and I suspect that if they attempt to become citizens, their outstanding debt will be a big red flag.

Re: Investments only go up right?

[rickb928]

My point was that buying crypto currency to be used for payments might look like an 'investment', and even be indistinguishable from an investment, but really was merely a deposit. And sure enough, it was interpreted as 'investment'. Should have taken the time to more fully explain.

Re:Investments only go up right?

[arth1]

Obviously you didn't read the actual thread. We're talking about foreigners coming to the US and studying, racking up debt and leaving.

Obviously, you didn't see that I started the actual discussion about the possibility of avoiding student loans by emigrating. Go another step up than what you bothered to do.

Way to speculate

[Actually, I do RTFA]

College debt is the hardest debt to discharge in bankruptcy. If you're taking a highly speculative position at that point in your life, you're better off running up credit card debt. Either you can pay it off with interest, or you have a bankruptcy before you graduate. Neither will result in 30-year-old you screwed cause of a bad bet.

Re: Way to speculate

[SuperKendall]

Technically true, but it's not like you can get a loan from the IRS to buy BitCoin, and students don't normally owe the IRS anything.

Re: Way to speculate

[OrangeTide]

Technically true, but it's not like you can get a loan from the IRS to buy BitCoin, and students don't normally owe the IRS anything.

It's simple, instead of setting aside income that would normally go on something like a 1099-MISC, you invest it. (or gamble it). That's technically the IRS's money. It's harder to do with a W-2 because your employer normally takes your estimated taxes out for you. But I suppose you could make up a goofy estimate and borrow money from the IRS that way too.

DISCLAIMER: I do not advocate tax fraud. The IRS will probably find you and try to ruin your life.

Re:Way to speculate

[bluefoxlucid]

College is a highly-speculative position. It's part of why some of us are advocating for apprenticeship and trade school programs as well as just college access. The Democratic party has sort of built a narrative where you go to college and you're a winner, or you don't go to college and you're a loser; it doesn't work like that.

College educations require several years of time investment. Full-time college requires large amounts of attention and takes a toll on your capacity to work, which means you're either driving yourself insane or you're losing financial ground--yes, you can go to college and come out behind someone who skipped all that and tried to drive right into a career.

The rate of advancement of a minimally-educated, self-studied, experienced worker after four years is much higher than that of a new graduate with little practical experience; and there are far more basic engineer positions in technical fields (e.g. IT) than there are senior, lead, or management positions (e.g. CISO). You'll get to be a highly-valuable engineer earlier (in time) if you start out by diving into work and a little part-time study than you will if you do a solid bachelor's degree and then begin your career 4 years late; you might not have the career opportunities of a college graduate, but you'll be a well-paid engineer or senior engineer earlier the graduate who doesn't get those opportunities.

You'll also be damned far ahead in terms of money by that time.

Student loans make this even worse, of course, because you end up stacking up debt while you can't pay it off, and it collects interest while you wait. The Federal government pays that interest in subsidized deferments; otherwise you're going to mainly pay interest on your loan, making the actual cost of college tiny in comparison to the cost of the loan with which you paid for college.

The biggest risk, however, is the job market.

250,000 IT positions became available this year. Over the next 5 years, we project another 1.5 million positions. Sounds great, right?

What you see: 40% turn-over of job rate. HR working with anywhere from 3 to 15 recruiters. Each job gets posted 15 times on every online job search system. Millions upon millions of IT jobs pop up all throughout the year. A super hot market!

We have projections of IT worker demand growth. We have projections of salary growth. How many other students are running to college for IT?

Do you know if there will be an enormous glut of IT workers in 5 years? Do you know if there will be a slow-down in hiring? No.

That's the risk you take.

It's why we need to create some sort of cooperative employment programs, apprenticeships, and vocational programs. We want to do something like provide free access to two- or four-year college for everyone with less than $100,000/year of income (good luck with that: Donald Trump Jr. just has to move out of his dad's house when he turns 18, get a small apartment paid ahead by his father, and have daddy not claim him as a dependent so he can take free college; how do we write the legal language?). We also need to provide a way for them to ensure they won't come out of college begging for a McJob.

We can do that with shorter programs--apprenticeships (notable for plumbers and electricians), vocational training, etc.--and with cooperative programs in which you work while you attend college or trade school. A sponsoring organization would have a job prepared for you, and leverage you while you learn.

Think about computer programmers, network engineers, and the like. Do you need a Masters Degree in Computer Science and Information Systems to do this job? Well, no. To do the job of the senior technical lead programmer, you do; to do code clean-up, implement some basic software functionality, and otherwise handle those tasks that got most programmers into programming, you just need Googlepedia.

Here's the big secret: lots of t

Re:Way to speculate

[yithar7153]

I wish I had mod points. I want high school counselors to stop pushing college on everyone because it's not guaranteed to be a good return and for many people they don't need to go to college.

Re:Way to speculate

[thegarbz]

College is a highly-speculative position.

Horseshit. Minimum certifications in order to enter the job market isn't speculation. Your idea that somehow the job market will allow people without these certifications to enter is ... well that isn't speculation either, that is wishful thinking.

Re:Way to speculate

[bluefoxlucid]

I've worked for several government contractors, I was an IT Security analyst and then an IT Security Engineer for 4 years at the Social Security Administration until 2012, and I've done IT systems engineering and currently work as an IT Security Engineer at a major broadcasting corporation.

I have a passing understanding of computer networking from CISCO-centric classes taken in high school in 2002 and 2003. I transferred my high school classes to college under an academic agreement, took a few basic sciences, and got an Associate's of Applied Science. I have a CompTIA Security+ certification from 2003.

My first office job--the one that came after Best Buy--started with a confused-looking internal recruiter (not an agency) asking me a bunch of questions about how I know what all these tools are when I have no relevant educational background. I told him I have strange hobbies and no friends. They pulled in some engineers, we talked about security tech, and they hired me. I helped with penetration tests, designed security policy for major defense contractors, and wrote the final reports for security assessments.

I learned about intrusion detection systems at Social Security's National Computer Center in Woodlawn, where I helped deploy a new IDS product (Google doesn't tell me what it is, so I'm not telling you what we used), worked out the best ways to use the tools available, and trained our analysts to use customized dashboards restricted to custom searches so as to essentially summarize only the data involved in a particular incident as we turned interesting and anomalous behavior into a logical description of the incident at hand.

Right now, an auditor is training himself to be a CISO, while mentoring me in performing broad-scope ISO27000 audits of our business--the kind of thing you typically outsource to IBM, EY, PWC, Qualys, and others.

I've been through the job market without college.

More than that, though: you seem to have missed that maybe the degree you chose in 2008 will get you into an overbloated job market in 2012, while the next degree over would have gotten you into a market with a desperate labor shortage. You can still get a job:

For men, the jobs with the highest rate of overqualification in 2014 included retail salespersons, customer service reps, and food service managers. For women, they were secretaries and office support workers, customer service reps, and teacher assistants.

... at Best Buy, working next to a guy who dropped out of high school and gets paid the same.

Women are actually using their degrees better--maybe. I actually came within 8 credits of an Office Administration degree, qualifying me as a secretary or office support worker. Teacher assistants also can benefit from a little education in education. Of course, I've met plenty of teachers with English or Math degrees and no Education degrees.

So I got into a high-demand job market without an appropriate degree, while people with Bachelor's degrees regularly end up at McDonalds. You want the appropriate degree to match the high-demand market when you get out of college, not the one that's in demand when you go in--which is speculation. Fail it and you might end up at McDonalds; you'll certainly end up with lower pay.

Re:Way to speculate

[Actually, I do RTFA]

e want to do something like provide free access to two- or four-year college for everyone with less than $100,000/year of income (good luck with that: Donald Trump Jr. just has to move out of his dad's house when he turns 18, get a small apartment paid ahead by his father, and have daddy not claim him as a dependent so he can take free college; how do we write the legal language?)

Why is it so important not to pay for Don Jr.? Cause that seems to make things much harder.

Re:Way to speculate

[bluefoxlucid]

The whole concept of free college if your income is below $X opens up two questions: are your parents able to afford college for you (are they super-rich millionaires?), and are you able to access that money? As a dependent on someone else's tax return, you're part of their household as far as income is concerned; if you file yourself, you're not. That seems straight-forward until you start trying to figure out how to get free college for your kids when you're a millionaire and nobody thinks you need assistance for college.

When you're dealing with poverty-line cases, there's not much wiggle room to set something up: the influx of daddy's money is already putting you near the income limits and cutting down the size of your assistance. When you decide a decently-middle-class, somewhat-okay, maybe-struggling family needs assistance, it's easier to sustain a single person on an income below those levels. When you just say all middle class but nobody upper-middle, suddenly rich folk can set their kids up to live lavishly and still get them free college.

Mostly, we don't want to tax people a whole hell of a lot (which will inevitably end up taxing the middle class, although the rich get higher taxes as well), so we want to leave the rich to fend for themselves. Imagine trying to tax the rich 80% to pay for all kinds of things, instead of taxing them 43% and paying for all kinds of things. Remember when Bernie announced his single-payer tax plan? 2.5% increase in income taxes on everyone (poor, middle-class, rich), plus 6.5% on payrolls (back-shifted into wages and forward-shifted into prices, mainly paid for by the middle-class). If the rich are paying 80%, how much are the middle-class paying?

A bigger question: if the rich are paying 80%, how do we raise taxes again when we need more revenue?

Be mindful: I've developed a tax plan wherein we have universal healthcare and shift the social security OASDI payroll taxes up to the top tax bracket as income taxes, and the top bracket is still under 45%. No two-adult household with less than $55k of income would have paid net taxes in 2016 in that model, either--in any two-week time span. I might be able to fit Bernie's college plan in there without breaking 45% at the top bracket. That $55k limit goes down over time, and the effective tax rate paid by any household also goes down year after year.

I'm a social democrat, and also kind of keep myself challenged and amused with financial wizardry.

Re:Way to speculate

[Actually, I do RTFA]

Mostly, we don't want to tax people a whole hell of a lot (which will inevitably end up taxing the middle class, although the rich get higher taxes as well), so we want to leave the rich to fend for themselves.

Seems pretty penny-wise, pound-foolish. For one, there are very few rich kids compared to poor/middle class kids. Second, I think pretty much all the various "benefits if you make less than X" introduce a lot of paperwork and errors that are solved by just taxing rich people more and giving it to everyone. There's a reason UBI is so compelling compared to welfare.

Re:Way to speculate

[bluefoxlucid]

there are very few rich kids compared to poor/middle class kids

Yes, which ends up with odd things like CEOs making $100 per employee per year and being multi-millionaires. That's why I push back against progressive ideals that start with "let's tax the rich a whole lot!": you're not going to pay for healthcare or raise wages that way.

I think pretty much all the various "benefits if you make less than X" introduce a lot of paperwork and errors that are solved by just taxing rich people more and giving it to everyone

In general, the bureaucratic and administrative overheads are in low single-digit percentages of systems that cost very little. Social Security OASDI makes up about $900 billion and Medicare makes up over $1 trillion of our spending, yet the administrative overhead there is about 1% (OASDI) and 2% (Medicare). Remaining programs are around 95%-98% efficient in terms of administrative overhead, with HUD and SNAP being in the $50Bn-$100Bn range in total program costs, and WIC around $6Bn.

That's all about $200 per American taxpayer per year or $125 per American (total population) per year.

There's a reason UBI is so compelling compared to welfare

Largely because UBI advocates don't understand the tax system, don't understand economics, and propose a system with high risk and no failure controls.

A Universal Dividend only, taxing 12.5% of all income (personal and corporate), would pay almost $7,000 per year to every adult in 2016. This is enough to lower the cost of our HUD, SNAP, and TANF programs and ensure that they reach every family in need; it's not enough to end all need for those programs. The costs only come down because many recipients are so much less-poor that they're no longer qualified, and many others who remain qualified are so much less-poor that we pay out less in total to them all.

The Dividend itself, with only the rough viability computations and no adjustment of the resulting tax rates, would lower corporate income taxes from 35% to 33.5%, and reduce the top tax bracket from 39.6% to about 36.2%. With the Dividend paying twice-monthly, every American household has an increase in take-home income across any two-week span; and Social Security's retirement and disability benefits programs are permanently-solvent under this program, as the Dividend takes some of the load (you get the same total benefit, but OASDI pays your owed total benefit less the Dividend).

Yes, that's right: there is no "taxing rich people more".

Besides immediately ensuring nobody is homeless or hungry (with the help of SNAP, WIC, HUD, and other programs whose costs fall), the Dividend increases the spending capacity of the poor and middle-class. That creates demand and thus jobs, so the poor inner cities with 13% unemployment suddenly have people going out and finding employment instead of coming home empty-handed. Recall that they're less-poor thanks to the Dividend, and receive less in welfare benefits: the Dividend keeps paying, and the welfare they lose (and risk not re-acquiring) with employment (and income) is smaller than it would otherwise be, so the Dividend increases the incentive to work as well as making more work available.

That's the bigger end of lowering costs. More job availability means less welfare need. It also means more productivity (fewer unemployed) and thus the Dividend gets bigger, causing a feedback loop (it levels off eventually). This is actually kind of dangerous, and we have to temper it by making people more-poor overall so as to reduce the number of jobs.

I can do that, too.

You reduce the number of working hours defined as "full-time", thus people can't produce as much, thus the wealth per-capita is lower, thus the number of consumer jobs available falls. We work 4 days, or 6 hour days, or whatever, and remain as wealthy as ever (or a touch more), except that the poor are able to get by.

Wow

[Gilgaron]

So if you're going to do something stupid with a loan, at least make it one that can be discharged through bankruptcy...

I hope

[reanjr]

I hope these aren't the same students asking for debt forgiveness.

Re:I hope

[tinkerton]

I could very well believe that these are the same students asking for debt forgiveness and they'd be right. If you hear how many people have to work a large part of their lives to repay their student dept then students investing in cryptocurrency sounds a lot like a desperate gamble to get out of a deep hole.

The whole description of getting a loan "Student loans arenâ(TM)t just for buying textbooks, No. 2 pencils, and apples for bribing teachers anymore. " is ridiculous.

Re:I hope

[swb]

I think this is right. The worse the loan terms are, the more desperate the borrower will be to eliminate the debt.

But to be honest, I bet there's a non-zero percentage of people looking at this as a great source of speculation capital on something that looks no-lose.

The whole student loan situation is a total mess. The universities push up tuition and expand their bureaucratic fiefdoms, dorms become luxury condos, and idiot students self-indulge in luxury living.

Meanwhile, all this debt accrues and its insulation from ordinary bankruptcy probably has it over rated as a security, meaning its used as leverage for much more and riskier debt, just like mortgages. And we all knew how that went.

Plus, student loans are just a giant drag on the economy. The young people starting to earn adult wages are crippled by debt and spend much less on economic growth activities. Houses don't get remodeled, old cars get driven, fewer trips, less total consumer spending -- all those activities pump up the economy and have a multiplier effect. Student debt service seems like a tax.

I keep thinking a student debt crisis will happen, but it never does.

Re:I hope

[rogoshen1]

Your post is 100% spot on insightful; and those chickens will come home to roost at some point.

I'm not a libertarian by any stretch of the imagination; but the student loan situation is one thing they're right about.

Re:I hope

[yithar7153]

I wish I had mod points so I could mod you up. But yeah the situation is a mess. A lot of tuition is wasted on bureaucracy, and people don't spend money when they don't have money to spend.

Re:I hope

[Bing Tsher E]

Houses that don't get 'remodeled' have doors and windows that leak heat like a sieve.

Re: I smell bullshit

[reanjr]

21% of students buying crypto used student loans. Not 21% of student loan recipients use it to buy crypto.

to be fair

[liquid_schwartz]

For certain degrees it could be true that you're more likely to cash out on a lucky bet than the degree itself. [Aggrieved group] Studies type degrees probably aren't too marketable.

Re:to be fair

[bluegutang]

"Grievance Studies" is the accepted name :)

Better than investing in a college education?

[butchersong]

Realistically, crypto is likely to yield a better result than their humanities, arts, social science education. Looking at this chart... chart it appears to me there are other students making worse choices. At least the investment is unlikely to drop to zero value.

Re:Better than investing in a college education?

[nine-times]

What does that chart even show? The Y axis is just labelled "percent".

Anyway, if you're studying art in college because you're looking for a financial ROI, you're probably going to be disappointed, but I'm not sure that's why people study those things.

If the "financial value" of your education drops to zero, at least you still have the education. If the price of bitcoin drops to zero (which is far from unthinkable), you've got jack squat.

Re:Better than investing in a college education?

[thegarbz]

What does that chart even show? The Y axis is just labelled "percent".

Notice that regardless of which year you look at on the graph the total of all points added up is very close to 100?

Actually the totals are consistently around 90 so there's probably a line missing entitled "other".

Re:Better than investing in a college education?

[nine-times]

I just mean more simply, what's being measured here? Is that the percentage of people graduating from college with degrees in each field, by year? How is anyone supposed to derive any meaning from a chart where there's no context and the axes aren't labelled?

Re:it's not an investment. it's gambling.

[rogoshen1]

So is a bachelors degree -- and at this stage, i'm not sure which is more likely to pay off.

"Apples for bribing teachers" ??

[Rosco P. Coltrane]

Seriously? What century is the OP from?

When I was a student, teachers and TAs could be bribed with acid - and I'm not that young...

Re:"Apples for bribing teachers" ??

[DeBaas]

Well a nice Ipad will get you quite far. Especially considering what teachers earn....

Re:"Apples for bribing teachers" ??

[HornWumpus]

What? Acid is CHEAP.

Green bud was the bribe of choice.

I'm down with OPP

[PopeRatzo]

I really would like to see these students' application essays. They don't sound like the brightest bulbs.

Also, can we please just make college free so banks can't continue to be loan sharks to young people? I mean, what the fuck. Kids are coming out of school with six-figure debt. That along with the fact that we've allowed corporations to disintegrate pensions and only a tiny percentage of people will ever have enough money to retire guarantees that there's a financial crisis coming that will make 2007-08 look like a walk in the park.

Re:I'm down with OPP

[Krishnoid]

When it comes to speculative finance, they probably don't have to be as bright as they do lucky enough to get out in time.

Re:I'm down with OPP

[PopeRatzo]

Think about it. When you throw limitless dollars at a limited amount of goods / services, what happens? Prices rise - rapidly. That's what's happened in higher education over the past several decades. Stop backing the loans, and the price will fall. It's Econ 101.

Stop requiring the loans and the price will fall even further. The reason tuitions have gone up is because we have this stupid system where the government guarantees loans so the universities know there's money to be made.

Instead of lending money, just make tuition at all state schools free, as in zero cost. If someone still wants something more "special", they can go pay for a private university. Right now, the bushels of money that are going to universities aren't being spent on educating students anyway. Like health care, when you have a middleman (loans, insurance companies,etc), you just end up increasing costs and debt.

We need single-payer education from kindergarten through college degree.

Re:I'm down with OPP

[PopeRatzo]

That's insane. Why should I pay for someone else to go to school?

Why should I pay for the roads you use? Why should I pay for the military to protect you? Why should anyone pay more for a product than what it cost to make? Why should a dime of money go to someone's profit just for owning a share of stock and having nothing to do with the products?

All these are questions that you will be better equipped to answer when you get out of middle school.

Re:I'm down with OPP

[PopeRatzo]

No one does that. The tale that this country or that country pays for a 'free' university education is just that a fairy tale.

https://www.independent.co.uk/...

https://www.investopedia.com/a...

http://money.cnn.com/2017/04/1...

Smart

[110010001000]

Why fight it? If Facebook can be one of the most valuable companies in the world, why can't some imaginary currency? It doesn't pay to fight the flow.

Re: I smell bullshit

[Anonymous Coward]

No, they surveyed student loan recipients:

"we found that 21.2 percent of current college students with student loan debt have used financial aid money to fund a cryptocurrency investment."

https://studentloans.net/financial-aid-funding-cryptocurrency-investments/

Re: I smell bullshit

[war4peace]

English is not my main language, so I might be at fault here, but this phrase makes no fucking sense to me. Especially the bold part.

"The Student Loan Report surveyed 1,000 current college students with student loan debt about whether they were asked whether they used their student loan money to invest in cryptocurrencies like Bitcoin"

Could someone with more knowledge break down the phrase in bits I could understand?

Re:Of course

[110010001000]

Even better would be phony currency generated by free/unmetered dorm electricity!

Re: I smell bullshit

[110010001000]

It is just a mistake. They meant "The Student Loan Report surveyed 1,000 current college students with student loan debt about whether they used their student loan money to invest in cryptocurrencies like Bitcoin"

It isn't necessary to proofread in order to publish in 2018.

Re: I smell bullshit

[war4peace]

Thank you!
That makes more sense, but contradicts OP's statement.
I guess I have to read TFA. Sight...

Re:What banks?

[PopeRatzo]

Banks don't own the loans, the federal government owns 90%+ of loans these days.

The federal government doesn't profit on student loans. Banks do.

https://www.rollingstone.com/p...

https://www.forbes.com/sites/p...

Better investment than college

[Anonymous Coward]

Especially if they're majoring in *any* of the "let's invent new gender identities" majors.

Re:What banks?

[AlanBDee]

Link.
Banks don't own the loans, the federal government owns 90%+ of loans these days. It was part of Obamacare and the interest in the loans is a large part of how they passed Obamacare like they did.

Not being able to discharge student loans happened when the government began backing the loans. It wasn't the banks demanding this, it was the Federal government.

Further, it's a bunch of private universities who really target kids with crazy sales tactics like; "You've won a scholarship. We will cover $35,000 or your $55,000 tuition costs per term. " Meanwhile, the local state university is about $5,000/term. Banks have almost not blame in this mess.

How does that even work?

[guruevi]

I'm used to working with grants and government loans. Typically, you at the end don't actually see the money, you get to distribute money from the fund provided and have to give a pretty good accounting.

Stuff like meals and lodging are scrutinized and only permitted to a certain extent, so how do students get this 'free money' to "live off" in school so they can spend it on frivolous stuff? Back in my day, we used to have this thing called "a job" and you worked at it vacations, weekends and nights to get food. It's a 30 year loan at like 4-5%, that's almost as good a a mortgage.

Re:How does that even work?

[tomhath]

The article is nonsense. You can't buy crypocurrency with a student loan. You buy things with money. Saying this money was student loan and the money you spent on spring break was from Daddy is absurd. It's all one pool of available funds, trying to compartment it into this money and that money will get you into trouble every time.

Re:How does that even work?

[Anonymous Coward]

I agree that he doesn't understand the way loans work, but you could have just said "you don't understand how loans work" rather than the bizarre insult screed you did.

Re:How does that even work?

[gravewax]

FYI, my brother makes a very healthy living off chopping wood. Fortunately most millennials are too lazy or too self entitled to realise hard work actually can pay quite well.

Re:How does that even work?

[physicsphairy]

If you
1) Had no job
2) Received thousands of dollars in student loans
3) Spent thousands of dollars on cryptocurrency.

Then, yes, you bought cryptocurrency using your student loans. Or are you saying if the loans hadn't been approved the students would have dropped out of college but continued to pay for the cryptocurrency? Whether or not it's provable to a degree of legal certainly, it's pretty obvious that the function of the loan was to enable the purchase of the currency.

Re:How does that even work?

[guruevi]

Nope, I'm a millenial per definition. I just never had to deal with living off debt, I only spent what I had.

Re:How does that even work?

[vix86]

Pay out on the remainder. If after you apply it to tuition and board you have money left, usually the remainder gets dispersed to you in the form of a check. I had a friend where this happened. He was going to a smaller college and had a student loan. After the tuition was paid for that semester, he had a few hundred bucks left over that the school bursar dispensed to him as a check.

Re:How does that even work?

[guruevi]

That seems like a recipe for disaster. You can get a "school" to sign you up, cancel your classes and you can pocket a multi-thousand dollar unsecured loan? Especially with government funds, you should have to account for every dime spent and pay back unauthorized spending.

Re:How does that even work?

[imidan]

Not really. The money goes directly to the school to pay your tuition. If you withdraw or cancel all your classes, they don't give you the money. The money that the student gets is residual aid, or what's left over after paying for tuition, room/board, fees, and whatever. This is usually a fairly small portion of the loan, and a lot of students use the residual to pay for books and other expenses. Also, if you withdraw having already been given the residual aid, you are billed and expected to pay it back pretty much immediately. If you take the residual and stay in school but just never go, you'll flunk out and lose your financial aid eligibility, get kicked out of school, and lose your loan deferment, meaning you'll have to start making payments on your loans within 6 months.

Unless when you say "school" you mean those scare quotes to indicate that it isn't a real school. And, yeah, there are sometimes schools you can sign up for, get financial aid, and they'll just give you most of the money (taking a cut for themselves) without any actual education happening. But that's financial aid fraud, and they prosecute that.

I love the bullshit here

[Anonymous Coward]

as many as one in five college kids may be using their student loans to cash in on the cryptocurrency craze

So that's anywhere from zero to 1 in 5 real specific range--assholes.

STEM degrees are the only ones worth debt

[Anonymous Coward]

> investing in Ethereum or Ripple may be a better investment than a bachelor's degree in comparative English literature

News flash - for that particular degree, it is a better investment, and not because cryptocurrencies are good investments (they aren't).

Here's a fun game to play: when you read a news article that talks about Jane* (not her real name) struggling to pay rent, buy food, and make payments on her student loans, look for what degree the subject of the article earned. In the last one I read, she was making $18/hr as a photographer's assistant after she graduated with a degree in women's studies from a private college, and had over $200K in debt that she had no idea how she would ever pay off. The simple solution - don't go to an expensive private school, get a degree in a worthless subject, and then live in a high-cost-of-living area - was completely beyond her ability to grasp. Which is probably why she got a degree in women's studies in the first place.

Re: I smell bullshit

[MrTester]

Your probably right, but I could see a survey looking at the discussions around granting student loans asking whether or not anyone has talked to them about using student loan money to buy crypto-currency, then someone misreading the article.

They're crazy

[DontBeAMoran]

People who buy Bitcoins are completely crazy if you ask me.

They should be buying Dogecoins instead! Its exchange rate of 1 Dogecoin = 1 Dogecoin has always been true since day one!

Re:They're crazy

[kaatochacha]

thanks for that, I've got like 34K dogecoins myself. He's so cute~!

Re: I smell bullshit

[jetkust]

Source? The poll is clearly about what you said it is not about.

Either Way They Win

[Tupper]

If it goes up, they'll be rich!

If it goes down, they'll get a financial education!

Re:I smell bullshit

[Oswald McWeany]

if you told me 1 in 5 college students knew what crypto currency was I'd be skeptical. Telling me 1 in 5 are using student loans to gamble on it is just ridiculous.

If you told me 1 in 5 college student made crap up on surveys... I would believe that.

I remember being that age, I remember I used to always put nonsense down on surveys, I never answered accurately. College aged students are the least reliable group to give surveys to.

Re:What banks?

[tlhIngan]

Banks have almost not blame in this mess.

Banks in general are risk-averse, and student loans are pulling at all the red flags that any lender would use to signal a risky loan.

Things like:
* No credit history (they're coming out of high school and few probably got a credit card to build up a credit history)
* A big loan (6 figure sum!)
* No assets to speak of (teens, again)
* No assets to speak of even after purchase (i.e., you're not buying an asset with the loan)
* No steady employment
* Delayed payback

Knowing all that, would you loan someone $100,000+? Even a mortgage means the bank has something to secure the loan.

It's why the government has to tilt things so it isn't so risky on banks - such as non-dischargable, guarantees on repayment, etc.

Banks aren't stupid. Student loans are structured the way they are because no financial institution is stupid enough to make such loans unassisted.

Re:I smell bullshit

[pr0fessor]

They were to busy spending their student loans on binge drinking and drugs to understand the question.
 

Actual article

[FeelGood314]

https://studentloans.net/finan...

College costs have spiraled out of control

[rsilvergun]

meanwhile wages have been in decline. You're summer job at even twice minimum wage assuming 50 hours/week @ 15/hr for 4 months (total vacation time, assuming you manage to work spring break and holidays + 2 +1/2 months summer) is $12k/yr. We'll pretend you don't pay taxes on that. Congrats, you just barely covered your tuition. Also, hope you kept your GPA up, because anything
So no, you're not going to work your way through college. Not unless you're one of those freaks who doesn't need sleep or does math while sleeping. That means there are lots and lots of new loans out there for you to live off of (or try to) while desperately trying to claw back the American Dream. Hence the reason you've got stuff like this happening.

The thing that pisses me off is that all of this was predicted by my college's newspaper back in the 90s when the federal funding started to be cut by that asshat Clinton & his right wing congress. Now I've got a kid in college and I spend every dime I get on school for her and we're still gonna end up $50k in debt for a 4 year degree.

Re:College costs have spiraled out of control

[guruevi]

What I meant is that my education was paid for by grants and other government money, but I never spent any of the money in those accounts for food. Back when I was working as a student, I earned maybe $5/h, that wasn't enough for a lavish lifestyle but it was and would still be enough today for what I needed - even today, you can find housing for $100-200/month (that's 4-5 days of work) and food at $5-10/day, if you don't work in the food industry.

Spotted the trans theory majors!

[Applehu Akbar]

Obviously the students "investing" in imaginary currency are not econ majors. Whatever their concentrations, they will soon be broke, out of school, no job prospects, and hoping that the STEM students will create the tech that will one day fund their Universal Basic Income.

Investing with student loans is smart.

[aussersterne]

I don't know about cryptocurrency, though.

What I do know is that I felt very proud to not take the full cost of attendance out as loans when I was doing my degree. I thought (and the "adults" told me) that I was very smart to minimize my borrowing.

I know two separate people who took out the full cost of attendance loan (max they could get) every semester they were in school, and used that money as down payments on their first rental buildings. Years later, they both now have small real estate empires, the loans are paid off, and one retired in his '30s, all started by student loans. Both leveraged their student loan debt into investments that paid off.

Meanwhile, I was under the debt thumb for years and years and am still working for a salary 50+ hours a week. Someone was smart, and it wasn't me (despite what the older generation applauded me for).

On the other hand, I'm not sure that cryptocurrency is quite the same deal. Seems like it would be smarter to invest and rent-seek as the people that I know did.

Re:it's not an investment. it's gambling.

[dj245]

So is a bachelors degree -- and at this stage, i'm not sure which is more likely to pay off.

It will pay off as a bachelor's degree at least. That's an entry requirement for a lot of jobs. Customs and Border Patrol agents being one of them. Starting salaries in the 60-70k range, not bad if you have an otherwise nonmarketable degree.

The Bull Flag

[wfrazee2004]

I really have to question the way the data is presented here. It makes it seem as if a significant segment of the student population is using student loans to fund crypto investments. There is almost no evidence that this is the case in the broader currency / holdings markets.

At minimum its irresponsible presentation of the data.

Re:it's not an investment. it's gambling.

[OrangeTide]

Theoretically the knowledge you acquired has some value, even if your skills aren't terribly marketable and the slip of paper that is your degree is worthless.

In 10 years those *coins are probably going to be worth around zero. You will have learned nothing from them. And the coins you have left will not even buy you a milkshake. At least your college degree can be used as a napkin.

Re:I smell bullshit

[kaatochacha]

I still do that on surveys. I have an entirely fictitious persona made up that I give information on .
He's a 45 year old widowed bookbinder with 11 children, but is oddly illiterate.
If you ever encounter that in a dataset, it's me!

Re:it's not an investment. it's gambling.

[Darinbob]

The degree will pay off in the long term, probably short term too. It's mandatory for a lot of jobs. For those jobs where it isn't mandatory, it will still get you more pay and more promotions.

Buying it?

[Deadstick]

Considering the level of supervision in some school IT departments I've seen, they might be mining it.

Why not?

[some old guy]

They're pretty much screwed anyway, with hopeless debt, a dead-end job if they can find one, and a society that is unraveling before their very eyes.

Really, what have they got to lose?

Unless they're going into law, medicine, or high finance, how much bleaker can their future be?

Bad timing

[kaptink]

"1,000 current college students that have student loan debt were surveyed on the single question discussed in this article. Pollfish conducted this survey on behalf of The Student Loan Report. The survey began on March 16, 2018 and finished collecting results on March 20, 2018. "

Probably the worst time to trade at the moment. If you are going to do it, do it on an up-trend :)

Re: What banks?

[PopeRatzo]

Uhm. According to the CBO the United States make 1.6 billion in profits off of student loans in 2016

Nope.

https://www.forbes.com/sites/p...

Re:I smell bullshit

[mark-t]

The biggest problem I have with swallowing this is that when I was student. and living off of student loans, money was *FAR* too hard to come by to take a risk like this on it... if you happened to lose money because bitcoin went down, it could mean that you don't get to keep eating or have a place to live before the school term is over.

As for using "extra" money? That's just as much bullshit... my experience with student loans is that they afford you pretty close to exactly what you'd need, and sometimes not even that, forcing you to cut financial corners well below any normal standards of comfort. The term "starving student" is not a false stereotype... I've been there, as have many others that I know.

Re:What banks?

[bws111]

The insurance against risky mortgages is the house. You don't pay, they get the house. Student loans are unsecured. You did know that, didn't you?

2008

[elistan]

Huh. I wonder how many students used their student loans to invest in Miami condos and Arizona houses in 2008...

Both are positional goods.

[o_ferguson]

College degrees and Bitcoin are both Positional Goods from an economic standpoint, so either of them is a poor thing to gamble on with debt financing.

I'm buying houses

[Chewbacon]

These dumb fucks will never have the credit to buy one, but even if they do they'll default on their first mortgage. Then they'll have to rent from me me meeeeee.

Philosophy

[sdinfoserv]

sure, a 6 figure loan for a philosophy degree with 20K of it used for cryptocurrency - might as well burn crypocurrency along with the sheepskin......

Re: What banks?

[PopeRatzo]

Your link also calls you a liar saying banks don't own student loans.

Nope. Look closer.

lDIOT 4 year degrees

[p51d007]

Most of them go into debt, 5-6 figures, come out with a degree that doesn't pay enough to: pay it back, rent/mortgage/food/utilities/transportation, THEN blame everyone else that it's "not fair" and want the debt forgiven.

Ummm...

[Petersko]

"...but some wily students think that investing in Ethereum or Ripple may be a better investment than a bachelor's degree in comparative English literature."

I wish to see your venn diagram.

Re:I smell bullshit

[green1]

Not related to students specifically, that level of financial acumen is far too common.

I used to install TV service in people's homes. I remember going in to a subsidized housing complex at one point to do this, and while I was installing several hundred channels of HD TV, they were having a conversation about which charity should provide their next meal. I wanted to withhold the service on compassionate grounds, but I knew they'd just buy it from someone else if I did. It was just that they had completely messed up priorities.

Not quite

[rsilvergun]

student loans are structured the way they are because banks lobbied for it. This way they could get huge interest payments with zero risk while defunding colleges (and reaping the tax benefits from doing so).

You were close, but your explanation wasn't nearly cynical enough. Like a mean spirited Ocam's razor.

please hit your children

[bingoUV]

Yup. Americans need to hit their children. Hard. Then youth does not engender the invincibility syndrome.

This is unrelated to other assorted stupidities of youth.

Re:I smell bullshit

[bingoUV]

What if they are "sure" their investment will pay off nicely ?

Difference

[DrYak]

If you aren't making grades and progress towards your degree in Germany, you are bouncing down the stairs of the university.

There's a difference between :

"If you are among the 1% elite of outstanding results, you might get a change to get some help to pay for your tuition with four "zeroes" after the significand.
(Or you could try the sport. If you make our team win the local skull smashing pet sport...)"
(Or at least that's how the US sounds to us).

and :

"Try not to fail too many exam to the point of getting kicked out of the university(1), and as long as you keep paying your *semester* tuition which is just a tiny sum(2), smaller than you *monthly* booze budget, you can stay at the uni.
If you're really low on cash, even that small sum can be helped.
If you're working *at* the university (TA, admin work, etc.) tuition is nearly lifted".

Yes being a total doof will get you kicked out of Germany's (and other European countries' ) university.
But there's a big difference with the privatized education they have on the other side of the atlantic pond.

---
(1): In Switzerland: Needing to repeat a year more than 3 times in a row, needing more than 2 years sabatical, taking more than 5 years to finish your *master's* thesis etc.
These are not actually "ground for expulsion", only criteria that the uni administration will talk to you to see if it does really make sense for you to keep at the uni.
(2): personal experience in Switzerland and Germany. And France isn't much more expensive than that.

Re:What banks?

[thegarbz]

Knowing all that, would you loan someone $100,000+? Even a mortgage means the bank has something to secure the loan.

Simple answer is you wouldn't and why would you need to? What kind of a person can't start their life out of university without a $100000 loan? Hell I did it with $5k and a $600 car to my name. Talk of loans and mortgages weren't even considered until a few years after I started working.

Unwise

[elgatozorbas]

Rule number one of investing: only invest money you don't need. Borrowing money to invest is a complete contradiction. In the case of student loans that may not be such a problem (not living in the US I have no idea how well protected you are).

Rule number two of investing: only invest in what you understand. Debatable in this case.

Rule number three of investing (as opposed to speculation): do value investing. No investment whatsoever could be further away from value investing than crypto currency. I am a sufficiently old fart to know that what went up yesterday and the day before may go down tomorrow, especially if it has no intrinsic value.

This seems like problems in the making...

Investment? Hah.

[biggaijin]

This is sort of like putting a second mortgage on your house and taking the cash to the dog track. It's likely that you will be living a healthy outdoor lifestyle soon.

Re:I smell bullshit

[mark-t]

It doesn't matter how "sure" you are,,, when you are that broke, you don't spend your money on stupid shit because you *will* be homeless otherwise.

Re:I smell bullshit

[bingoUV]

It doesn't matter how "sure" you are,,, when you are that broke, you don't spend your money on stupid shit because you *will* be homeless otherwise.

Being "sure" precludes consideration of "otherwise".

It is stupid to be sure, of course, but kids are sure of far stranger things.

That doesn't mean what you think it Means

[dcw3]

"but some wily students "

Gambling doesn't make you wily.