1 in 5 College Students Used Loans for Cryptocurrency Investments
Some college students consider trading cryptocurrencies to be a better use of their student loan money than traditional spending, such as school supplies and other living expenses. According to a study by The Student Loan Report, over one-fifth of university students with student loan debt indicated that they used their borrowings to invest in digital currency such as bitcoin as reported by the New York Post.
Also, students receiving federal student aid through loans can sometimes have excess funds, which can be used in any way that a student chooses, including investing.
The student loan news and information website found that more than 21% of the 1,000 students surveyed indicated that they used their borrowed cash to gamble on the highly volatile digital currency market.
While school administrators may look down upon the practice of using borrowed funds for non-school expenses, college students are able to use loans for «living expenses,» a flexible category that covers a wide range of potential necessities.
The U.S. Department of Education program called Federal Student Aid has guidelines for students who are receiving financial aid. Typically, once a student loan is approved, the funds are placed in the student's account at the college. The money is used to pay for expenses such as tuition, room, and board.
However, there are times when the loan funds exceed expenses, which is called a credit balance. The school must pay the student or parent the credit balance in the account within 14 days unless the student notifies the school that the funds are to be used for future expenses.
As a result, college students can receive a refund check from the college for the credit balance. The students can use the funds for
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