Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
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Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#2Let's say that one thinks eventually a large percentage of for profit private colleges will have to close their doors. (think small ones that no one has ever heard of, not your Ivy's) What's the analog to The Big Short here?
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#3Except in the subprime debacle, millions of people could declare bankruptcy and walk away. With student loans. The debtors are simply screwed with no recourse. That’s a big difference.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#4$1,654,255,000,000 USD and counting ($38k/student) [0]
There are US citizens with over a million dollars in debt. [1]
This is crazy. Other countries invest in people, sometimes including non-citizens.
1. https://www.marketwatch.com/story/he-ran-up-a-million-dollar...
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#5Let's say that one thinks eventually a large percentage of for profit private colleges will have to close their doors. (think small ones that no one has ever heard of, not your Ivy's) What's the analog to The Big Short here?
There are asset-backed securities called SLABS (student loan ABS) that I guess you could make some kind of credit swap out of if that's what you're into. Probably super expensive to construct such an instrument since it like isn't a super liquid market.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#6Lifetimes of debt service is a lenders dream
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#7So, assume colleges overcharged. Maybe they overestimated the value of those new facilities. Lenders are just lenders, they shouldn't have to take it in the shorts, whatever universities are churning out underemployed workers seem like the issue here.
The market for universities facing students sucks too. It's like getting a bunch of blind bids, and they're probably not "educated" enough to build that spreadsheet, plan 5 years out, and realistically guess that they'll be gainfully employed enough to cover the payments at the end of the tunnel.
There's a market issue, and there's a hundred things students can do fuck-all to fix.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#8Except in the subprime debacle, millions of people could declare bankruptcy and walk away. With student loans. The debtors are simply screwed with no recourse. That’s a big difference.
Silly question: is there any legal way to default on a student loan? Can that be exploited? En mass? Perhaps?
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#9> Student Loans a Lot
Well, bad for student. ¯\_(ツ)_/¯
I keep being baffled by continued use of the newspaper title style on the English-language web—but at least it's a steady source of entertainment.
Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says
#10Except in the subprime debacle, millions of people could declare bankruptcy and walk away. With student loans. The debtors are simply screwed with no recourse. That’s a big difference.
Even if that were the case, declaring bankruptcy at the age of 23 doesn't really make the future easier. Doing so in your 40s is easier one could argue because you'd had more connections and life experience, in a sense.