Jul
17

$40 Billion Worth of AAA Student Loans Are at Risk of Becoming Junk

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Getting Relief, Paying LessIt’s no secret Americans are having trouble paying off their record $1.2 trillion in student loans. What’s less known is that the trend is turning a typically sleepy corner of the bond market into a potential hazard zone.

People who borrowed money for education before the financial crisis are taking longer than forecast to repay their debt, thanks in part to relief programs. That’s creating a risk for holders of securities created by bundling the loans — which are government guaranteed — because the bonds may not be retired by maturity…

$40 Billion Worth of AAA Student Loans Are at Risk of Becoming Junk

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