Students Are Using Their Loan Money To Buy Cryptocurrency, Study Says (fastcompany.com) 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.
Investments only go up right? (Score:3)
It is not like some high volatile investments crash and burn just as fast as they had skyrocketed.
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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? (Score:5, Insightful)
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...
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*whoosh*
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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.
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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.
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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".)
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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.
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New York, London, Paris, Munich.
Everybody talk about pop muzik.
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Most countries will fund tertiary education for their own citizens.
Care to check on your definition of "most"? I think you mean "European".
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whose government is immune to corruption, and actually values their citizens
Surely you jest.
Re:Investments only go up right? (Score:5, Funny)
The only way to get out of paying a student loan is to die.
This is not true. Emigrating usually works too.
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'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.
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'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.
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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.
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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? (Score:4, Insightful)
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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 [today.com], then they're stuck with it. (Probably not surprising, but worth mentioning.)
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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.
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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.
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please hit your children (Score:2)
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.
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Way to speculate (Score:5, Insightful)
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.
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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
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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.
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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.
Wow (Score:2)
I hope (Score:5, Funny)
I hope these aren't the same students asking for debt forgiveness.
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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.
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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
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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.
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to be fair (Score:5, Insightful)
Better than investing in a college education? (Score:3)
Re:Better than investing in a college education? (Score:5, Insightful)
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.
"Apples for bribing teachers" ?? (Score:2)
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...
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Well a nice Ipad will get you quite far. Especially considering what teachers earn....
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What? Acid is CHEAP.
Green bud was the bribe of choice.
I'm down with OPP (Score:2)
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
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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.
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The federal government doesn't profit on student loans. Banks do.
https://www.rollingstone.com/p... [rollingstone.com]
https://www.forbes.com/sites/p... [forbes.com]
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Nope.
https://www.forbes.com/sites/p... [forbes.com]
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Nope. Look closer.
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Link [investopedia.com].
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.
Re:What banks? (Score:5, Insightful)
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.
Not quite (Score:2)
You were close, but your explanation wasn't nearly cynical enough. Like a mean spirited Ocam's razor.
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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?
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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
Re:I'm down with OPP (Score:5, Insightful)
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.
Smart (Score:2)
Better investment than college (Score:3, Insightful)
Especially if they're majoring in *any* of the "let's invent new gender identities" majors.
How does that even work? (Score:3, Interesting)
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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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.
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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.
College costs have spiraled out of control (Score:2)
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
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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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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.
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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.
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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
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Nope, I'm a millenial per definition. I just never had to deal with living off debt, I only spent what I had.
I love the bullshit here (Score:2, Insightful)
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.
They're crazy (Score:2)
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!
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thanks for that, I've got like 34K dogecoins myself. He's so cute~!
Either Way They Win (Score:5, Funny)
If it goes down, they'll get a financial education!
Actual article (Score:2)
Spotted the trans theory majors! (Score:2)
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. (Score:5, Interesting)
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.
Buying it? (Score:3)
Considering the level of supervision in some school IT departments I've seen, they might be mining it.
Why not? (Score:2)
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 (Score:2)
"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 :)
2008 (Score:2)
Both are positional goods. (Score:2)
I'm buying houses (Score:2)
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 (Score:2)
lDIOT 4 year degrees (Score:2)
Ummm... (Score:2)
"...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.
Unwise (Score:3)
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...
Re: I smell bullshit (Score:2, Informative)
21% of students buying crypto used student loans. Not 21% of student loan recipients use it to buy crypto.
Re: I smell bullshit (Score:4, Informative)
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/
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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?
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It isn't necessary to proofread in order to publish in 2018.
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Thank you!
That makes more sense, but contradicts OP's statement.
I guess I have to read TFA. Sight...
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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.
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They were to busy spending their student loans on binge drinking and drugs to understand the question.
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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!
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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 sometim
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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
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So is a bachelors degree -- and at this stage, i'm not sure which is more likely to pay off.
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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.
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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.
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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.
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