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Hi, quant here (in Uni). I have some obligation to respond to (2), because I know something about it and you've mischaracterized it alot. We have around $1.5T in student debt currently, at its peak in 2008, there was around $12.7T in housing debt (there's more now, interestingly). Like 2008 era mortgages, student debt is securitized and sold in the form of SLABS (Student Loan Backed AssetS; [1]). However, to my knowledge, there are no derivative securities trades on these SLABS, whereas in 2008, nth derivative securities were trades on mortgage-backed securities (MBSs; when I say nth, I mean derivatives were traded on derivative were traded on derivatives, increasing leverage). In Q2 '08, around 4.5% of mortgages were "seriously deliquent" (i.e. were over 90 days past due). This figure jumped to over 21.0% in July '08 [3]. In contrast, serious delinquency for SLABS is around 0.254% [4]. This is different by a full two orders of magnitude (a little less) from the crisis levels. While I get why you might be led to believe that (2) is possible, the data doesn't back it up at all. Remember that almost everyone takes out a mortgage, but only around 50% of relatively young people take out student loans. [1]: https://www.salliemae.com/investors/asset-backed-securities/
[2]: https://www.federalreserve.gov/pubs/feds/2008/200859/200859p... (pages 2 and 3, use ctrl+F and "delinquent")
[3]: https://www.federalreserve.gov/pubs/feds/2008/200859/200859p... (page 5)
[4]: https://www.salliemae.com/assets/investors/asset-backed-secu... (page 4; I'm taking this security to be representative, sue me) |