Robinhood Aims to Attract College Students With $20,000 Tuition Giveaways

Could you get free tuition money from the trading platform?

Robinhood has become a popular trading platform, especially among newer investors who are attracted by its promise of no fees and who are enticed by its user-friendly interface.

Now, the brokerage firm is aiming to expand its reach further by attracting more college students to its platform. As part of this outreach effort, it will be giving away $100,000 in tuition money and providing a financial incentive to any students who sign up to make trades.

Here's what you need to know about Robinhood's new initiative.

Robinhood will provide free money, tuition to college students

Robinhood is offering two different ways for college kids to get free money from the brokerage firm:

• Every student who signs up to trade with a .edu email address will get $15 deposited into their Robinhood account that they can use to make investments.
• Students who sign up with a .edu address will also be entered into a contest for a tuition giveaway. In total, $100,000 in tuition will be awarded, with five students receiving $20,000 each.

To promote its trading platform and encourage college students to take advantage of these offers. Robinhood employees will also visit schools across the United States, including historically-Black universities and community colleges. These employees will not just focus on the trading platform's features and functionality, but will also cover broader subjects including financial literacy and investing basics.

"As a new year of college kicks off for 20 million students nationwide, we want to walk alongside them as they learn about financial markets and take that first step toward investing," Robinhood said in a press release announcing the initiative.

Robinhood's focus on college students isn't surprising, as close to 4 million of the app's users have indicated they are currently in school. The median age of Robinhood users -- age 31 -- also skews much younger than many other brokerage firms. Many of these young investors appreciate the unique features the app provides, including the ability to buy and sell assets via their phone as well as have access to cryptocurrency investments, which not all brokerage firms offer.

However, while it can be a good thing for people to begin investing when they are young -- and even while they are in college -- it's important to have an understanding of how to invest safely and smartly. And Robinhood has faced some criticism for "gamifying" investing, including incentivizing high-risk day-trading strategies and encouraging investments in volatile assets including high-risk cryptocurrencies.

College students could be especially vulnerable to some of the features of the investing app that allegedly encourage riskier trading behavior if they don't have a deep understanding of investment basics before they put their money on the line.

Younger investors who want to take advantage of the financial incentives Robinhood is providing should do so only after making sure the funds they plan to invest aren't needed for immediate expenses, such as tuition fees and costs of living. They should also make sure to understand the risks of investing and devise a plan for how to build a diversified portfolio of safe assets that give them the best chance of building wealth for the long term.