The student loan bubble is going to pop

Spamalot
Spamalot

The student loan bubble is going to pop. This isn't sustainable. There are now plenty of alternatives for a BA/BS (coding bootcamps, occupational training, certificates) that will fast-track individuals into the career they want without putting them $200k in the hole. Law school enrollment (and the quality of students attend them) has already plummeted and it's looking like the for-profit schools will shutter within about 3 years (Charlotte School of Law already lost their federal loans and will likely shutdown in May).

What's the best way to short the student loan bubble?

Other urls found in this thread:

salliemae.com/about/investors/Asset-Backed-Securities/default.aspx

Methshot
Methshot

Why can't it keep going up?

TreeEater
TreeEater

450 billions is all?
us could sell a few warships and it would be covered.

Sharpcharm
Sharpcharm

What's the best way to short the student loan bubble?

there is no direct way, but short tech companies like Google or Facebook. they are the ones who are promoting the coding meme

Emberfire
Emberfire

You know aircraft carriers only cost like $10billion to build... even if you sell them at $20billion, you'd need to sell 45

shut the fuck up you moron

Illusionz
Illusionz

Coding boot camps are horrible if you want any legitimate coding experience.
There HAS been plenty of BA/BS alternatives, but all "professions" require university degrees.
The only people who lose out in this are the fucking idiots who went to shitty unranked or for-profit schools. For everyone else who went to a school with name brand recognition, its status quo.

askme
askme

He thinks his student loan matters
You are probably hoping for that bubble to pop so you don't have to pay huh?

T. assmad gibsmedat

Firespawn
Firespawn

Government programs are hard to short bro. Its like saying: what can I do to short social security.

one shitty teacher gets paid 80,000 a year to regurgitate outdated information at a mediocre university to 10,000 students over an entire career
one great teacher does an excellent youtube lecture that reaches millions and is available forever.
tfw people think college and university is continuing for anything other than profit while relying solely on its past reputation as a distributer for valuable information

VisualMaster
VisualMaster

certification bro, they need the certification. What are you gonna decorate walls with?

dont remember exactly but im pretty sure the interest rate for holding those securities is ridiculously low. I dont think its going to pop anytime soon either.

BunnyJinx
BunnyJinx

universities are invaluable research institutions

without the research done in them your precious youtube teachers couldn't do their jobs

they are epicenters of valuable information, but they have to commercialize to produce a profit because the bottom line is the only thing our garbage tier culture values

Fuzzy_Logic
Fuzzy_Logic

what shit meme

little of what we enjoy would be possible without universities, it's our fault that they have to rely on selling people underwater basket weaving degrees in order to get funding and survive

Stupidasole
Stupidasole

because people aren't paying off their loans, that is happening already. more and more people are taking out student loans, many of whom are dropping out before their first year is over and spending that loan money on shit for themselves. I had a roommate like this (yes, he was dumb)

whereismyname
whereismyname

Because these are driven by university prices. The ROI of a BS/BA is already diminishing, and eventually, people are going to decide it's not worth it to sink a quarter million for an undergrad education. If you continue on to grad school, that could explode to $500,000, with zero guarantee of a job. That's an insane gamble.

Yeah, but they're promoting coding academies, bootcamps, and STEM degrees which are still worth the investment, not $250,000 degrees in African American Studies. Majority of BS/BAs are soft majors with terrible returns. Universities are already directing funds away from these departments because people realize they're bullshit and offer nothing of value.

Illusionz
Illusionz

Nobody gives a fuck about where you went to school senpai. Hiring managers for entry level positions in tons of industries know you come out of college with very little relevant experience and they adjust their expectations accordingly.

Spazyfool
Spazyfool

certification bro, they need the certification

certification (exams) and education (lectures) should be offered separately.

Lunatick
Lunatick

Yeah, I get that. I'm trying to figure out how to bet against a company like Sterling Partners which is the main investor behind trash-tier InfiLaw for-profit schools, one of which recently lost of their access to federal loans. Those don't even have a university to fall back on for subsidies. Unless the ABA makes major reforms in bar entry (allowing more - and dumber - people to become lawyers), there's simply no way for these institutions to survive.

Garbage Can Lid
Garbage Can Lid

Yeah they know you come out not knowing shit but you are wrong in that no one cares where you went to school. Certain institutions hold tremendous prestige in their respective areas of specialty. Others are known for attracting the smartest and most adaptable. For example, someone who graduated out of BYU Marriott Business or Stanford is gonna get a lot more recognition than someone who went a non-UC state school. Getting your foot in the door after graduation is the hard part and people who come out of good schools have a lot more opportunities available to them because recruiters flock to their campuses.

MPmaster
MPmaster

I want to hear one thing specific of what you enjoy that the universities provided that isnt your underwater basket weaving degree .

cum2soon
cum2soon

Im not aware that they are if they are. I know a few in which they are not.

But if you mean "should be" like "they should" I would definitely hop on that boat. I always wanted to sell exams to a student for 100k$ a pop.

massdebater
massdebater

The top universities are fine and will continue to be fine (though even major national universities are directing money away from the liberal arts because students are getting wise to the fact soft majors are a monumental waste of time and money). But the vast majority of student loans are NOT be spent at these institutions. They're being spent at 5th-tier and for-profit trashpits.

Emberfire
Emberfire

should I start with the medical advancements, or go straight into the infrastructure you're using to make your shit posts?

CouchChiller
CouchChiller

You can't. The student loan bubble isn't like the housing bubble was.
A key difference is that mortgages have an underlying asset (the property) which has some value and could be sold.
When mortgages popped, there were catalysts. For example, home prices soared, banks got people in homes they couldn't afford, then home values began to drop at the same time adjustable rates took effect. People couldn't pay their mortgage and their home wasn't valuable enough to cover the debt. So they went bankrupt - thousands at once.
Defaulted mortgages = huge decline in mortgage backed securities. Plus, they were overrated, really full of junk mortgages despite a high rating. Point is, there was a lot of money dumped into this market beyond the value of homes and mortgages.

In order for student loans to pop you'd first need people to default. That can't happen with these loans. Or, you'd need borrowers come to their collective senses and stop taking loans.
They can't all go bankrupt because that kind of debt persists through bankruptcy.
There is no underlying asset.
Student loans are guaranteed by the fed govt.
Private lenders exist, but if they went belly up they'd be bailed out.

GoogleCat
GoogleCat

Because it isn't an asset bubble, but rather a demand bubble, there isn't really any way to "short" an asset.

New_Cliche
New_Cliche

I always wanted to sell exams to a student for 100k$ a pop.

Nojokur
Nojokur

I know i asked for something specifically, but that may have been too difficult. At least i know now that the AED and such medical equipment were made in uni and funded by meme degrees. What would we have done without degrees in 21st century womens political dance theory majors in the 1960s?

Spazyfool
Spazyfool

You sound like a nigger

Harmless_Venom
Harmless_Venom

yo check out my latest album its called dopest rent seeking institutions vol 2

happy_sad
happy_sad

Wait, half a trillion in student loans?
How is that fucking possible?

Poker_Star
Poker_Star

How is that fucking possible?
well universities started spending money on stupid sjw shit and actually competed over making the most expensive education.

Deadlyinx
Deadlyinx

/k/ on Veeky Forums

You have to go back

Methnerd
Methnerd

is there anyone to replicate what the movie "The Big Short" did, but for student loans?

we could make sicccc gainz Veeky Forums

StrangeWizard
StrangeWizard

I originally came to a similar conclusion but some things to consider.

There is no underlying asset
The underlying asset is the future assets of the student. Those are very real.

Housing loans were also guaranteed by the fedgov.

You can still default (techincally) with these loans. And your wages/money/etc will be garnished. Its worse than a default so the effect would be the same if not worse.

Now imagine if students started defaulting en masse. This would probably constitute a crash in the student loan securities market and would probably be treated as a market failure very similar to the housing one.

It also a when statement as this is a problem which always arises from subsidization.

Fuzzy_Logic
Fuzzy_Logic

looks like it's pretty close

New_Cliche
New_Cliche

Student loans are backed by the federal government, so you would short the government, the best way to do so would be to short the dollar.

Bidwell
Bidwell

Actual banker here (fixed income but I'm knowledgable on this regardless), if you've done your research and DD and still think this is a good idea then short whichever of these you think contains the most risk and is likely to take on defaults first:
salliemae.com/about/investors/Asset-Backed-Securities/default.aspx

Bear in mind that you'll need an investment bank to underwrite CDSs against whichever tranches of whichever S-ABSs you want to short. You'll pay out the ass in premiums until the defaults start rolling in then you'll make money.

Also bear in mind that the US gov't will bail out Sallie Mae at any cost necessary as it is a vital component to the US college education system. Best of luck champ.

I'm sure whoever underwrites your swaps will love your stupid ass though since you'll likely be paying premiums of over $1m per year until the impossible becomes possible.

Firespawn
Firespawn

This data is from 2013. It's actually $1.3 trillion now.

GoogleCat
GoogleCat

They securitize student loans just like mortgages, so you probably could.

Need_TLC
Need_TLC

You can short anything you expect to decrease in value. I borrow your asset and sell it for $10k, the market value of the asset suddenly drops to $7k, I buy a replacement asset for $7k and return it to you, I profit $3k. You can do the same thing with bonds.

Lord_Tryzalot
Lord_Tryzalot

free tuition via city programs

King_Martha
King_Martha

if you think demand will decline, you short the servicers, like SallieMae or Navient.

if you think the asset value will decline - because bernie sanders will wipe out everyone's debt - then you construct a swap with reference on a markit index.

this is a crowded trade, btw.

farquit
farquit

why does government prefer to create shit quality debt assets to simply funding education outright?
who does it benefit?
does anyone believe that student loan is somehow motivating the graduates, or that it somehow teaches them responsibility?

Isn't it enough that better educated people have higher earnings and pay higher taxes?

massdebater
massdebater

Feelsgood to live in a country where I don't have to pay shit for attending a university.

I paid 240€ for the last semester, which includes a train/bus ticket for a huge part of the whole country.

Grad school doesn't cost a penny more as well, the degrees usually have really good quality. My profs put the important books online + the university library lets you just download like half their books.

hairygrape
hairygrape

Luckily Trump will fix it. He had the best ideas on student loan of anyone in the race.

Snarelure
Snarelure

Literally retarded

WebTool
WebTool

Less responsibility on the government.
They hand out loans, consumers are expected to have the forthright to know whats a good uni vs a bad one.

CouchChiller
CouchChiller

You have no business in business if you only understand the mortgage backed securities bubble because of a movie.

Fuzzy_Logic
Fuzzy_Logic

let me know what you came up with and how universities selling esoteric history of cum swallowing degrees is responsible for funding it though the most roundabout method of state subsidization ever.

Soft_member
Soft_member

That's what I'm saying.
There isn't anything to short in the college bubble because it isn't an asset bubble.
It's a demand driven bubble.

LuckyDusty
LuckyDusty

How tf can it pop when the loans are non-dischargable

Booteefool
Booteefool

kys
ngr
fgt

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