The final extension of the pause on student loan repayments in the U.S., interest, and collections ends on January 31, 2022. Officials had stalled student loan repayments in 2020 during the peak of COVID-19 lockdowns when the economy was at a near standstill. Government educational loan officials said the additional time and fixed end date empowered borrowers to plan for resuming payments, while reducing delinquency and defaults after the restart on February 1, 2022.
Anyone with college debt would agree that student loans can be a major headache for borrowers. As the extended student loan hiatus comes to an end, CollegeFinance.com polled more than 1,000 student loan borrowers to analyze how they’re preparing to resume their payments. Surprisingly, the researchers found a few interesting connections between repayment plans, age groups, crypto, and NFTs. The highlights include:
- Nearly 45% of surveyed borrowers plan to invest in crypto or NFTs in preparation for payments to resume – Gen Z’ers were most likely to attempt this strategy
- Since the pause began, 18% of borrowers have been using the extra money they’ve pocketed to invest in crypto or NFTs
- Nearly 1-in-10 plan to use crypto and/or NFT earnings to make their payments when the pause is up
- Overall, only 10% of borrowers actually knew when student loan payments resume- Feb 2022
“Given the sharp uptick in crypto and NFTs over the past two years we expected to see some borrowers turn to them for what they hope can be a source of income, but nearly 1-in-5 doing so was surprising. While some might consider this spending money, they should be saving for the time when payments resume. Others might see this as an investment strategy to make more money to put toward their loans. This largely depends on the coins and NFTs they chose to invest in,”
stated Kevin Walker, CEO of College Finance Company in an email response to DailyCoin.
He went on to note that a majority of respondents said they’re turning to crypto and NFTs for the risker – yet seemingly higher – rates of returns that hypothetically might be available to apply toward their student loan payments. This risky strategy was the most surprising finding of the survey according to Walker.
“The fact that over 50% of Gen Z borrowers plan to invest in crypto and NFTs in hopes that earnings can help pay for their student loans really surprised our team. While crypto continues to make headlines, it’s interesting to see that the younger generation is so eager and seemingly untroubled by the risk of a fairly new and volatile investment category,”
While cryptocurrencies are exciting and hold the promise of long term gains, they are a highly volatile asset class. Financial experts will tell you to only invest what you can comfortably afford to lose within this type of investment. Also, it’s never a good idea to use borrowed money in any speculative investment.