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The student loan bubble is going to pop. This isn't sustainable.

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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?
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Why can't it keep going up?
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>>1777416
450 billions is all?
us could sell a few warships and it would be covered.
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>>1777416
>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
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>>1777446
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
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>>1777416
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.
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>>1777454
>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
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>>1777416

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one shitty teacher gets paid 80,000 a year to regurgitate outdated information at a mediocre university to 10,000 students over an entire career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
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>>1777548
certification bro, they need the certification. What are you gonna decorate walls with?

>>1777416
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.
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>>1777548

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
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>>1777561

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
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>>1777444
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)
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>>1777444
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.

>>1777449
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.
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>>1777489
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.
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>>1777561
>certification bro, they need the certification

certification (exams) and education (lectures) should be offered separately.
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>>1777548
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.
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>>1777581
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.
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>>1777575
I want to hear one thing specific of what you enjoy that the universities provided that isnt your underwater basket weaving degree .
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>>1777582
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.
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>>1777591
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.
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>>1777598

should I start with the medical advancements, or go straight into the infrastructure you're using to make your shit posts?
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>>1777416
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.
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>>1777416
Because it isn't an asset bubble, but rather a demand bubble, there isn't really any way to "short" an asset.
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>>1777610
> I always wanted to sell exams to a student for 100k$ a pop.
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>>1777638
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?
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>>1777598
You sound like a nigger
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>>1777674
yo check out my latest album its called dopest rent seeking institutions vol 2
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>>1777416
Wait, half a trillion in student loans?
How is that fucking possible?
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>>1777698
>How is that fucking possible?
well universities started spending money on stupid sjw shit and actually competed over making the most expensive education.
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>>1777454
>/k/ on /biz/

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

we could make sicccc gainz /biz/
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>>1777652
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.
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>>1777416
looks like it's pretty close
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>>1777416
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.
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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:
>https://www.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.
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>>1777698
This data is from 2013. It's actually $1.3 trillion now.
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>>1777721
They securitize student loans just like mortgages, so you probably could.
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>>1777665
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.
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>>1777416
free tuition via city programs
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>>1777416
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.
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>>1777416
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?
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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.
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>>1777416
Luckily Trump will fix it. He had the best ideas on student loan of anyone in the race.
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>>1777598
Literally retarded
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>>1778156

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.
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>>1777721

You have no business in business if you only understand the mortgage backed securities bubble because of a movie.
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>>1778186
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.
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>>1777955
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.
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How tf can it pop when the loans are non-dischargable
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>>1777721
kys
ngr
fgt
Thread posts: 50
Thread images: 4


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