Students Increasingly Using Financial Aid for Purchasing Cryptocurrencies

Major credit card issuers may have banned bitcoin purchases, but it’s not cramping the style of college students. According to a recent poll by US-based The Student Loan Report, more than one-fifth, or 21.2% of university students are directing financial aid funds to invest in the top cryptocurrencies. It’s a risky bet, one that could pay off in dividends or leave the students saddled with more debt than they initially inherited in a rising interest rate environment.

In the United States, 1.4 million-plus university students turn to private loans to finance their education, while the lion’s share of them use federal loans. With interest rates set to rise, these students could be on the hook for higher interest rates than they bargained for.

Meanwhile, students gain access to the cash money because lenders are in the habit of sending excess funds once courses are paid for back to the borrower. The funds are supposed to go toward living expenses, but investment savvy young adults are instead putting it into an asset class that could potentially deliver higher returns than anywhere in the traditional financial markets. Students aren’t required to disclose how the extra cash was spent. The report mentions bitcoin, Ethereum, Ripple and more.

Reference: https://www.ccn.com/financial-aid-fueled-crypto-purchases-on-the-rise/

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