The Student Loan Bubble

In the previous installment of this series, I walked through the math that basically invalidates the pursuit of a 4 year degree for nearly everyone that needed to finance it through school loans at 6% or higher. The basis of this invalidation was the poor quality of the asset backing the loan, the degree itself. This installment will walk through the logic that dictates the quality of said asset, but before I delve into said diatribe, I want to illustrate for the non-finance types the relationship between assets and liabilities and the path to insolvency that ensues when you use debt to purchase inferior and/or depreciating assets – basically the crux behind the Asset securitization (subprime mortgage) and Pan-European sovereign debt crises…

Thanks to Jawara for ths link.

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