That doesn't make the problem any less worrisome. Factoring assumes that the company paying for an invoice will have the means to pay off the service rendered e

That doesn't make the problem any less worrisome. Factoring assumes that the company paying for an invoice will have the means to pay off the service rendered eventually (on a net 30/60/90 basis usually). Factoring helps to free up cashflow for the receiver, not necessarily guarantee that a remittance be satisfied. If the core value were the latter, the premiums go up so high that it's not really financially viable for most businesses to use factoring against their receivables. The problem with student debt is default, not cash flow. Further, the problem isn't the educational institution getting paid, it's the lender (in this case the government, and thus the taxpayers) who lent out money to people without any historical context of their ability to pay off a loan. Hence the quote: “On what planet does a financing vehicle with those kinds of terms and those kinds of performance metrics make sense,” he said.