More than one-fifth of current college students are pouring cash into the world of virtual currencies – and they are using their student loans to do it.
According to a new survey released by The Student Loan Report, 21.2% of active college students with student loan debt admit to using financial aid cash to fund an investment involving cryptocurrencies, such as bitcoin.
Drew Cloud, author of the report, says students are able to pull it off, by saying the extra cash is being used for “living expenses” and there is essentially no system in place to ensure that the borrower is using the leftover money for that purpose.
Last year, cryptocurrencies exploded into the investment scene, with bitcoin – the first and most notable crypto – seeing record growth from $900 to historic highs of $20,000, prompting other digital currency startups to enter the market.
However, this year, the days of astronomical price growth seem distant. Bitcoin and ethereum (the second biggest crypto on the market) have both significantly fallen off from their record-high prices. According to Coinmarketcap.com, bitcoin’s price is around $7,410 and ethereum is priced at $401.
What’s more, is that big tech giants Twitter, Facebook and Google have all made announcements in recent weeks and months to ban all advertisements for cryptocurrencies in an attempt to crackdown on blockchain scams enticing young people to invest.
Facebook said in a blog post in January it would block ads that “promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings and cryptocurrency.”
Despite the criticism of digital currencies by tech giants as well as financial regulators, some celebrities have still embraced the technology. FOX Business previously reported that eight-time winter Olympian Apolo Ohno and NFL star cornerback Richard Sherman have both invested in companies to promote blockchain, the technology behind cryptocurrencies.