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> If it's a bad bet for the bank, it must be far worse of a bet for young adults Contrary to popular perception, there's no robust private investor market for
by prostoalex 7y ago
> If it's a bad bet for the bank, it must be far worse of a bet for young adults
Contrary to popular perception, there's no robust private investor market for student loans. US Treasury is the predominant buyer.
https://www.advisorperspectives.com/dshort/commentaries/2020/03/16/the-fed-s-financial-accounts-what-is-uncle-sam-s-largest-asset https://www.advisorperspectives.com/dshort/commentaries/2020...
- AnimalMuppet 7y agoIf students were able to escape the debt by bankruptcy, the Treasury might not be allowed to buy the loans. Don't they have to invest in safe stuff?
- prostoalex 7y agoCorrect, the entire market for such loans would pretty much collapse - current yields are comparable to those of commercial real estate or high-yield corporate bonds, with none of the downside protections. Unsecured personal loans (that are subject to bankruptcy) are a valid asset class, coveted by LendingClub and some banks, but they require solid credit history and carry a higher interest rate, more aggressive repayment schedule, or both.
- mgleason_3 7y agoIt’s like this entire thread is from another planet and has no knowledge of the college loan program (student loans used to be dischargeable in bankruptcy like any other loan), its origin or even presidents Obama’s attempts to overhaul it and concerns that it was actually driving up the cost of college.
- AnimalMuppet 7y agoSo, rather than criticize, you might share some of the knowledge you think we are missing...