The Traderszone Network

Published in TZ Latest News 27 April, 2015 by The TZ Newswire Staff

Meet IBR, The Student Loan Bubble’s Dirty Secret

A little over a week ago we asked: “Is The Student Debt Bubble About To Witness Its 2007 Moment?” We were prompted by Moody’s decision to place 14 student loan-backed ABS tranches on review for downgrade as the ratings agency cited the very real possibility that the tranches wouldn’t fully pay down by their maturity date. In other words, some $3 billion in student loan-backed paper is now at risk of default. As a reminder, here’s an excerpt from the rationale:

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