In a four day survey conducted by The Student Loan Report, 21.2% of college students in the Unided States with student loans used their financial aid money to fund some sort of cryptocurrency investment.
The survey was based on one very simple question.
“Have you ever used student loan money to invest in cryptocurrencies like Bitcoin?”
One-fifth of college students that answered the survey, said yes. The question was a sinple yes or no with absolutely no context behind it, so how much or little of their loans was invested can only be speculated at this point. However because of the way in which students granted access to their loan money, only a small percentage of that money could have been used for investment purposes.
The way it works is relatively straight forward. Student’s effectively borrow more than they need for a semester of classes. Once the college financial aid office uses the necessary financial aid to pay for courses, the student is sen a refund check of any remaining balance.
Per the terms of the loan, this money can only be used for very specific reasons – mainly that of living expenses. However there is no system to ensure the student uses leftover money such expenses. As such, students can effectively violate the terms of the contract and use the money any way they wish.
In 2017, many students could have used the returns from such money to pay off a sizable amount of their loans and because they pay them off early, there is almost no interest on those loans.
However with the drop in value so far in 2018, it doesn’t appear the same may be true this year – at least not as of yet.
However this survey was only proposed to a total of 1000 students, so more surveys and more investigation will need to take place to learn how accurate the estimated figures really are.
If cryptocurreny has another spike this year as it did in 2017, this may begin to seriously hard the student loan banking firms, as they earn a large part of their money on interest rates that do not go into effect until after the student has fully graduated or is no longer enrolled in college.