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We're headed toward a financial crisis. Borrowers not being able to pay loans.. Awfully sounds like the mortgage crisis.

• tsunamifury 11y ago
  Except the government owns most of the debt, and can easily adjust it since it also mints the money.
• shostack 11y ago
  /EDIT/ Would love to know why I was downvoted for pointing out what seem to be very real differences in the circumstances and asking for some backup in the form of data as to why this will lead to the disaster that the parent stated without supporting facts. ----- I'm not sure they are equatable. - Don't pay your mortgage, lose your house. This partly caused some of the panic that made a lot of people try to sell when they couldn't make payments. Don't pay your student loans...give back your knowledge? If I recall correctly declaring bankruptcy won't get rid of these loans, but it isn't like people are on the streets. - A big factor in the mortgage crisis was how these bad loans were packaged into all number of convoluted and intentionally misleading securities products, and then dumped on the public markets where they became a large part of the portfolios of Main St. and Wall St. investors. Are there similar securities products around college loans, and is there data that suggests that repayment issues with them could have anywhere near the same impact? I'm genuinely curious for some data on this. It ultimately looks like the ones left holding the bag would be the government (not good, but they have more flexibility in how they deal with things that doesn't necessarily tank the economy) and other loan institutions/banks. I don't think anyone will shed a tear if the banks get hurt as long as it doesn't cripple the economy, which again, it doesn't sound like it would.