April 28, 2013

HIGHER EDUCATION BUBBLE UPDATE: Shocker: No One Wants to Buy Student Loan-backed Securities. “Worried by reports of rising defaults, investors turned up their noses at a new $225 million bond issue by Sallie Mae, the federal agency that packages individual student loans into large securities. The loan company canceled the offering after two weeks on the market. . . . Are student loans turning into junk bonds? With something like $1 trillion of student loan debt outstanding, investor skittishness is not good news.”

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