The clock started ticking on a financial time bomb this week for student loan borrowers — those in default will now be referred to debt collections.
Because of the messy state of the student loan world, the economic fallout could be far more widespread than anticipated, hitting some who typically would be able to pay back loans. It also comes amid recession fears, worries over higher inflation, and a slowdown in hiring.
It’s my understanding that after the housing crisis… Investors moved whatever they were doing in the housing market to the more stable student loans market and did the same thing there…
So basically this shit is going to come crashing down so hard… It will probably be worse than the housing market crash
People who were struggling before… Were able to compensate for the struggles they were facing when they stopped payment for student loans … Those same people are still struggling thanks to the great economy we were able to build back up…
So now they are in a worse spot and also have to figure out where to get money that has not been a factor in their bills for a long time…
Yup, SLABS. They’re a massive part of the derivative market, especially since student loans aren’t discharged through bankruptcy.
“Student loan asset-backed securities (SLABS)” I had to look that up.
Just for clarity of the thread, apparently SLABS contain private student loans. Many of the other conversations here are referring to Federal student loans. So these conversations don’t apply to each other. However, a single person can have loans of both types.
The derivatives market is leaning heavily on paused student loans when 2/3 of Americans are using layaway plans to buy groceries? And inflation is about to skyrocket again because of the tariff chaos?
Does the derivatives market deliberately choose bad long-term investments and plan on crashing? That would explain a lot.