Firstly, figuratively speaking can’t be collateralized

With MBS, new money was in fact collateralized because of the family otherwise assets getting bought, although “equity” inside the student education loans is the borrower’s future requested earnings, being hard to quantify

Secondly, the general marketplace for Slabs try a fraction how big is this new MBS industry through to the economic crisis. Eventually, because of government promises having FFEL finance plus the 2005 bankruptcy regulations, it’s unusual that student loan people manages to lose the brand new property value its fundamental funding, even though trends try exhibiting you to definitely youngsters is even more struggling to pay its fund. Continue Reading