Bitcoin and crippling student loans, the two things which are defining the financial futures of most college students in America. According to a survey held by Student Loans.net, college kids are using money from their student loans to buy bitcoin and other digital currencies.
The Student Loan report polled over 1,000 students for purposes of this survey and found out that one-fifth of those students put aside money meant for covering their expenses into purchasing digital currencies. The survey was conducted online via Pollfish, which specializes in online polling.
Young Americans “Most Enthusiastic” About Crypto
Founder of Student Loan Report, Drew Cloud, said:
“Younger Americans are certainly the most enthusiastic about cryptocurrency; they are the most active investors and want to get involved in the space in any way possible. However, I truly thought the percentage would be lower. As a college student, your budget is thin and that extra money could be used on rent, groceries, or books.”
However, Boston-based Attorney Adam Minsky was of the opinion that buying cryptocurrencies with student loans is “legally questionable.” Minsky, who specializes in student loans, says that the federal government might question whether such investments are related to students’ education or not.
“I would err to the side of it not being a kosher thing to do legally, but regardless of that I don’t think it’s a wise thing to do financially,” he adds.
Student Loan Report: Use a Savings Account Rather than Bitcoin
However, Student Loan Report discussed the survey in an article, and noted that if students have extra loan proceeds, for now, they should consider “stowing that money away in a high-yield savings account that they could later use to chip away at their student debt.”
There is always a chance that cryptocurrencies enjoy the explosive growth they did in 2017, thus, proving any criticism on the student’s risk as futile.
No other questions were asked in the survey, so it isn’t clear how much student loan money was invested in cryptocurrencies by the survey-takers.
A professor at MIT who studies cryptocurrencies, Christian Catalini, said he hopes “it wasn’t much.” However, he said student interest in digital assets marks a generational divide in thinking about finance.
“There is a new generation of consumers that tend to have no faith in traditional financial institutions, and I think they are approaching this asset with curiosity and excitement,” Catalini said.
Cryptocurrencies Remain Highly volatile
Cryptocurrencies have been marketing as get-rich-quick schemes on mainstream media and social media sites. However, they decidedly are not. The price of bitcoin has fallen in the past two months to $8,500, marking a more than 50 percent loss for people who bought it in December.