A Sub-Prime Student Loan Crisis?

The sub-prime debacle in residential mortgage loans was based on giving loans to weak borrowers based on the unrealistic value of the collateral asset. Neither the borrower nor the lender was enriched.

 

Are we looking at a emerging crisis / bubble in the student loan industry? The loans are given to unemployed 18 year olds, and the real value of a bachelor’s degree (or higher) is dubious at worst and, at best, hard to place a value on.

 

Collage grads are finding themselves strapped with massive debt as they matriculate into a weak economy.

 

This sounds familiar, like the homeowners who misjudged the value and the potential of the homes they borrowed against.

 

Kathy Kristof in Forbes goes so-far-as to call it The Great Collage Hoax. She tells of recent grads, pulling down 6 figures as professionals, who can’t get out from under the student loans that were supposed to help them.

 

Read Ms. Kristof’s piece, it’s a scary but important article.

 

MasterPlan Capital LLCFunding Commercial Mortgage Loans – Lending For Purchase and Refi Against All Types of Commercial Real Estate – Easy Application; Online

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