[aianus]

This sounds like an excellent arbitrage opportunity for a startup. Find mispriced student loans (say, some honor roll student in MIT Computer Science paying the same 7% as some fine arts student at University of Phoenix) and refinance them at 4%.

You could even securitize the debt and sell it to alumni! I know I'd buy Waterloo CS Class of 2018 Honour Roll debt at even 3%.

[roel_v]

This happens already. There was an article linked here some time about it. The twist was that the article scolded those companies, because it meant that the rates for government loans would have to go up, because their portfolios now consisted of worse borrowers.

Found it: https://news.ycombinator.com/item?id=9695568 .

[aianus]

Good. The interest rates should go up (and/or the tuition should go down) for these mispriced programs until they reach fair market value.

[gboss]

Pretty sure this is what Sofi does currently: https://en.m.wikipedia.org/wiki/SoFi

[cbhl]

If they're Waterloo kids, I'd hope they're financing their education past first year with their co-op income, rather than debt. :P

[aianus]

If you're good enough to do so I think it's more cost-effective to forgo co-op, stack on the debt, and graduate earlier so you can earn full-time salary and begin vesting stock.