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Bitcoin The Almighty Buck

Students Are Using Their Loan Money To Buy Cryptocurrency, Study Says ( 228

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.
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Students Are Using Their Loan Money To Buy Cryptocurrency, Study Says

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  • by jellomizer ( 103300 ) on Monday March 26, 2018 @03:33PM (#56329573)

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

    • Re: (Score:2, Insightful)

      by 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.

      • by rickb928 ( 945187 ) on Monday March 26, 2018 @04:00PM (#56329725) Homepage Journal

        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...

      • Most of us want to die anyway, and it's not like defaulting on it will *truly* harm you. Just a little bad credit.
      • by arth1 ( 260657 ) on Monday March 26, 2018 @04:24PM (#56329887) Homepage Journal

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

        This is not true. Emigrating usually works too.

        • 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.
          • '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.

            • by arth1 ( 260657 )

              '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.

          • by arth1 ( 260657 )

            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.

      • by dmitrygr ( 736758 ) <> on Monday March 26, 2018 @04:25PM (#56329895) Homepage
        Oh, they realize it. Why do you think they are campaigning for college student loan forgiveness?
      • 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.)

        • by martinX ( 672498 )

          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.

      • 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.

    • 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.
    • 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 :)
    • 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.
  • Way to speculate (Score:5, Insightful)

    by Actually, I do RTFA ( 1058596 ) on Monday March 26, 2018 @03:33PM (#56329575)

    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: (Score:3, Interesting)

      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

      • 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.
  • 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 (Score:5, Funny)

    by reanjr ( 588767 ) on Monday March 26, 2018 @03:35PM (#56329595) Homepage

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

    • 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.

      • by swb ( 14022 )

        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 i

        • 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.

        • 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.
  • to be fair (Score:5, Insightful)

    by liquid_schwartz ( 530085 ) on Monday March 26, 2018 @03:38PM (#56329617)
    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.
  • 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...

  • 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

    • 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.

  • 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.
  • by Anonymous Coward on Monday March 26, 2018 @04:02PM (#56329741)

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

  • by guruevi ( 827432 ) <`moc.stiucricve' `ta' `ive'> on Monday March 26, 2018 @04:04PM (#56329749) Homepage

    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.

    • by tomhath ( 637240 )

      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.

      • 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.

    • 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 mat
      • by guruevi ( 827432 )

        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.

    • by vix86 ( 592763 )

      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.

      • by guruevi ( 827432 )

        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.

        • by imidan ( 559239 )

          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 pr

  • by 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.

  • 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!

  • by Tupper ( 1211 ) on Monday March 26, 2018 @04:18PM (#56329851) Homepage
    If it goes up, they'll be rich!

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

  • 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.

  • by aussersterne ( 212916 ) on Monday March 26, 2018 @04:42PM (#56330001) Homepage

    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.

  • by Deadstick ( 535032 ) on Monday March 26, 2018 @05:23PM (#56330201)

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

  • 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?

  • "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 :)

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

  • 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......
  • 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.
  • "...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.

  • by elgatozorbas ( 783538 ) on Tuesday March 27, 2018 @07:08AM (#56332881)

    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...

The Force is what holds everything together. It has its dark side, and it has its light side. It's sort of like cosmic duct tape.