Student loans are a pervasive problem in the economy of the United States, and many people fail to get out of it despite securing well-paying jobs after education. Part of the reason is the exploitative interest structure of student loans, which charges students way more than what they initially signed up for. At the same time, high education fees make it impossible for most students to continue studying without getting into a student loan. Many movements like FIRE (Financial Independence, Retire Early) and minimalism have tried to address the problems of debt and student loans, but have only been sporadically successful.
Cryptocurrencies are now offering a new avenue for students to get out of debt. In a survey by College Finance, 44% of student loan debtors said that they invest in crypto or plan to do so in the future.
Since the start of the pandemic, there has been a pause in student loan repayment. Making the most of this blessing in disguise, people started investing heavily in cryptocurrencies. It also coincided with Bitcoin’s rallies, and many people benefited as a result. In the coming years, many people might use crypto investments as a way of getting out of student debt.
While experts laud the ingenuity of student loan debtors, they also warn against the dangers of this method. Owing to high volatility, crypto prices can go down on short notice. If that happens, debtors will have no option but to declare bankruptcy. It can have a serious implication on the economy of the country if left unhinged
