What will happen to those who got expensive student loans to get worthless degrees?

Quote from clearinghouse:

This sounds like solid reasoning, but let me ask you this (purely academic question):

The rate of return on student loans, even if they are guaranteed, is terrible. If we go into a hyper-inflation scenario where there is heavy inflation, would smart money even want SLM?

In the usual hum-drum of the market during periods of no volatility, it probably tracks the index relatively well. In periods of chaos, either up or down, it should be either a relative victim or a total victim.
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if you think we are going hyper-inflationary then it'd be a better trade to just get long some kind of commodity with a bit of leverage, say 125% long silver or copper or some type of food (coffee and cocoa i believe are already planted in a way that they are doomed as crops in the medium term anyways). not sure short student loans is the best trade in that scenario.

i was pointing out a good trade for just the lost couple decades we will face coming up as people realize there is no hope for many people to ever pay off their student loans, and also denies them the right to buy a home or anything else that needs a loan for it while they are trapped by their inescapable student loans.
 
Quote from dumb_mother:

if you think we are going hyper-inflationary then it'd be a better trade to just get long some kind of commodity with a bit of leverage, say 125% long silver or copper or some type of food (coffee and cocoa i believe are already planted in a way that they are doomed as crops in the medium term anyways). not sure short student loans is the best trade in that scenario.

i was pointing out a good trade for just the lost couple decades we will face coming up as people realize there is no hope for many people to ever pay off their student loans, and also denies them the right to buy a home or anything else that needs a loan for it while they are trapped by their inescapable student loans.
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Yeah, that's what I'm doing now: trading the dollar weakness through various commodities and what not. However, I don't like having such heavy exposure to commodities volatility for long term plays. I'm looking for some other candidates for diversification.

Got any local bank candidates in mind with heavy exposure to student loans? I'd make this bet, but the problem is that banks will have several diversified sources of income from other various loans. I'd have to isolate a particular lender with excess exposure to student debt to really, truly capitalize on some future fiasco.
 
Quote from clearinghouse:

Yeah, that's what I'm doing now: trading the dollar weakness through various commodities and what not. However, I don't like having such heavy exposure to commodities volatility for long term plays. I'm looking for some other candidates for diversification.

Got any local bank candidates in mind with heavy exposure to student loans? I'd make this bet, but the problem is that banks will have several diversified sources of income from other various loans. I'd have to isolate a particular lender with excess exposure to student debt to really, truly capitalize on some future fiasco.
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i haven't looked into it at all really was just thinking of where to take advantage of the situation. if you did some research you could find outside of a major metropolitan area an area with 5-6 private liberal arts schools within like 20 miles of each other. then you could try and search as if you were a student at one of those schools for who gives the loans~ i don't really know but if you could figure out which banks advertise to the students i'm sure those would be the local banks that will falter.

i'm a trader though i don't actually invest in long-term ideas like this, so i'm only help in providing untested theory on this long of a time frame. i am 100% cash each night
 
Quote from Dr. Zhivodka:

Short sallie?
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At some point that could be a great short. I think I'd wait to see some kind of actual legislation to forgive loans though.

Let's face it, having half your voters in 6 figure debt to predatory lending when they were 18, facing far more restrictive debtor laws than grown adults with jobs, is not a politically tenable position for the long-term.
 
Got you guys beat by 2 years lol.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=134767&highlight=slm


Still agree with everyone here. If things get worse, they're toast. With 10% unemployment and huge loans, there's not a chance they are going to be paying them off in full.

Quote from Ghost of Cutten:

At some point that could be a great short. I think I'd wait to see some kind of actual legislation to forgive loans though.

Let's face it, having half your voters in 6 figure debt to predatory lending when they were 18, facing far more restrictive debtor laws than grown adults with jobs, is not a politically tenable position for the long-term.
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exactly
 
Quote from chartman:

Who in the hell gives a crap about them or the millions that are unemployed and underemployed? We are a nation that don't give a damn about the misfortune of the other guy as long as we have ours. And we laugh at the few bleeding hearts that do show some compassion. We call them Socialists.

I remember a great number of years ago when I was an employee of an international company that was laying-off hundreds of people each week. Another worker told me to watch the bulletin boards because these laid-off people would be selling everything they owned at a bargain price. Real mercy being shown to his fellow workers!
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but when are there going to be layoffs of government workers who sap off the productivity of the private sector? why not fire 25% of them?
 
wow, you would really screw these people ?!?!? Looks like US is really cut throat place. Every day fight for survival.

Is it possible that place can fall that far that quick !?!?

People tend not to do that as it is below their level. I guess thats why they dont get really rich.

There is another level of living in luxury : able to afford to say no to these types of trades. Yes costs money but dont trade humanity for paper.
 
Can't default on these, and they will garnish wages. What will happen is they will pay them. The worst is these online degrees with big loans. Expensive toilet paper.


Student Loan Repayment Program (SLRP)

For Soldiers and officers who have an existing student loan obligation at the time of enlistment in the Guard, the Student Loan Repayment Program (SLRP) may pay up to $50,000 for certain jobs, with a six- or eight-year enlistment as a member of a unit.

In addition, current Guard members who extend their enlistment contract for a minimum period of six years are also eligible for this program, provided they meet certain requirements, including a qualifying score on the Armed Forces Qualifying Test and being in a valid Military Occupational Specialty
 
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