More and more students are turning towards investing in cryptocurrency to fund their financial shortfalls in universities. According to the website Save The Student, the proportion of students investing in some form of digital currency tripled in one year.
The Pandemic Effect on Cryptocurrency
Conventionally, students have been using financial help from parents, part-time jobs, and their savings to plug this gap. However, now, nearly 6% of the surveyed students are actively mining crypto.
The immediate cause of this turn of events has been the pandemic, which has caused a large instability in the part-time job market. Meanwhile, student loans have been insufficient for daily requirements as they cover only a small part of the student expenses.
However, this new trend has not been without its drawbacks as some students report that they lost money due to a lack of research before investing. The Financial Conduct Authority suggests that there is a thrill factor involved in these investments. Students are being highly lured by the ‘challenge and novelty’ aspect of crypto investments.
Use of student loans for investments
According to The Student Loan Report, one in five college students used student loans for investing in digital currency like Bitcoin (BTC) and Ethereum (ETH). Also, those students who receive federal student aid have further access to funds for personal expenditure. The definition of ‘personal expenditure’ being quite flexible, often it is used to invest in cryptocurrency.
Cryptocurrency is largely relied upon to clear massive college debts. However, there is a need for proper financial education and information, to be provided to the students in this regard to ensure their financial safety.
