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0 pointsrefurb9y ago0 comments

There is no stock of assets that are suddenly going to fall in market value.

Sure there is, the loans themselves.

Right now a bunch of lenders have $1.3T worth of loans. If those loans don't get paid off, they are $1.3T poorer.

0 comments

What would cause those assets to suddenly fall in value?

A huge uptick in default rates. The only reason why student loan paper has value is because there is an expectation that it will be paid off.

Ok, then what would cause a huge uptick in default rates?

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0 pointsrefurb9y ago0 comments

There is no stock of assets that are suddenly going to fall in market value.

Sure there is, the loans themselves.

Right now a bunch of lenders have $1.3T worth of loans. If those loans don't get paid off, they are $1.3T poorer.

What would cause those assets to suddenly fall in value?

refurbOP9y ago

A huge uptick in default rates. The only reason why student loan paper has value is because there is an expectation that it will be paid off.

Ok, then what would cause a huge uptick in default rates?

j / k navigate · click thread line to collapse