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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

#11

Post by tehjoker »

chiefalchemist wrote: post #8
ethagknight wrote: post #3

Except 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?

Here's the thing... when you do it en mass, it doesn't matter if it's illegal because nobody can do anything to stop you. It's called a strike.

Apparently the people that started http://rollingjubilee.org/ were originally working on a student debt strike project. Not sure exactly why they switched to a medical debt project, but it's certainly a worthy one.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#12

Post by sjg007 »

chiefalchemist wrote: post #8
ethagknight wrote: post #3

Except 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?

Vote for appropriate candidates

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#13

Post by psychometry »

chiefalchemist wrote: post #8
ethagknight wrote: post #3

Except 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?

Pretty sure mass suicide would be the only option.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#14

Post by wtvanhest »

arthurcolle wrote: post #5
ahnick wrote: post #2

Let'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.

That is one route, or I think the better route may be cds on revenue bonds for public or private schools. Should be cheaper cds, but just as damaged as the crisis rolls through

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#15

Post by planetzero »

We need to get rid of student loans. The problem is that Universities don't ever need to worry about a student defaulting and can keep increasing the prices of tuition with impunity. If they default, they don't care, because the money is already in the bank.

If universities had to worry about students defaulting, they would get rid of bullshit degrees that don't result in an actual job and the prices would come done due to free market forces.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#16

Post by jrs235 »

tehjoker wrote: post #11
chiefalchemist wrote: post #8

Earlier quoted context omitted.

Silly question: is there any legal way to default on a student loan? Can that be exploited? En mass? Perhaps?

Here's the thing... when you do it en mass, it doesn't matter if it's illegal because nobody can do anything to stop you. It's called a strike. Apparently the people that started http://rollingjubilee.org/ were originally working on a student debt strike project. Not sure exactly why they switched to a medical debt project, but it's certainly a worthy one.

>Not sure exactly why they switched to a medical debt project

My assumption is that the government and lenders of government guaranteed loans aren't selling the delinquent accounts for pennies on the dollar.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#17

Post by pilsetnieks »

aasasd wrote: post #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.

Well, for one, it's a news organization so newspaper style is somewhat acceptable for them, and second, as for your particular example, while it does read a bit like a garden path sentence, it's a completely valid compound noun.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#18

Post by jrs235 »

chiefalchemist wrote: post #8
ethagknight wrote: post #3

Except 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?

Yes. To default just don't pay. What I think you meant to ask was is there a way to escape repayment (get the debts wiped out in bankruptcy). Yes. It is possible to ask and get a judge to wipe out the student debt loan but the bar is usually fairly high and unlikely. Can it be done en masses or exploited. Not likely. You'd likely need Congress' involvement. Good luck with that and good luck with Devos.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#19

Post by lainga »

arthurcolle wrote: post #5
ahnick wrote: post #2

Let'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.

Not if you bet on the double-A tranches. Nobody will think to do that, not even Michael Burry.

Re: Student Loans a Lot Like the Subprime Mortgage Debacle, Watchdog Says

#20

Post by McTossOut »

planetzero wrote: post #15

We need to get rid of student loans. The problem is that Universities don't ever need to worry about a student defaulting and can keep increasing the prices of tuition with impunity. If they default, they don't care, because the money is already in the bank. If universities had to worry about students defaulting, they would get rid of bullshit degrees that don't result in an actual job and the prices would come done…

Universities need to be well rounded because students don't know what they're doing. Interests and motivation wax and wane during formative years. And ultimately degree plans stick due to publishing and research grants. (unless you're at a technical school in sheep's clothing)
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