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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.
It is not like some high volatile investments crash and burn just as fast as they had skyrocketed.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
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.
Your ad here. Ask me how!
I hope these aren't the same students asking for debt forgiveness.
21% of students buying crypto used student loans. Not 21% of student loan recipients use it to buy crypto.
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.
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.
So is a bachelors degree -- and at this stage, i'm not sure which is more likely to pay off.
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/
Even better would be phony currency generated by free/unmetered dorm electricity!
The federal government doesn't profit on student loans. Banks do.
https://www.rollingstone.com/p...
https://www.forbes.com/sites/p...
You are welcome on my lawn.
Especially if they're majoring in *any* of the "let's invent new gender identities" majors.
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.
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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.
Source? The poll is clearly about what you said it is not about.
If it goes down, they'll get a financial education!
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.
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.
STOP . AMERICA . NOW
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.
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Considering the level of supervision in some school IT departments I've seen, they might be mining it.
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.
You are welcome on my lawn.
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...