A Look Into The Most Toxic Student Loan Asset Backed Security (SLABS) In The Market
Harvesters,
Per the increasing media coverage on the now cliched Student Debt Bubble , I thought it would be both relevant and interesting to highlight the type of toxicity that exist with Student Loan Asset Backed Securities (SLABS). After skimming through countless prospectuses and thousands of pages of the most uninteresting literature imaginable, I founds something of the contrary: Navient Private Education Student Loan Trust 2014-CT - the epitome of the problem.
Navient Private Education Student Loan Trust 2014-CT - Prospectus:
Per the increasing media coverage on the now cliched Student Debt Bubble , I thought it would be both relevant and interesting to highlight the type of toxicity that exist with Student Loan Asset Backed Securities (SLABS). After skimming through countless prospectuses and thousands of pages of the most uninteresting literature imaginable, I founds something of the contrary: Navient Private Education Student Loan Trust 2014-CT - the epitome of the problem.
Navient Private Education Student Loan Trust 2014-CT - Prospectus:
- "Certain of the career training loans are bade to borrowers who are pursuing specific trade skills in such areas as computer technology, cosmetology, holistic health, mechanics,, art and music, design, and medical and dental lab technology. Other borrowers are pursuing degrees at community colleges or through internet-based education programs. The ability of these borrowers to repay their obligations under the trust student loans will depend on the availability of employment in these careers principally in the geographic area in which such borrowers reside. As a result, borrowers of certain types of career training loans may be more likely to default on their payments or have a higher rate of forbearance . Failures by borrowers to pay timely the principal and interest on their career training loans or an increase in forbearance could affect the timing and amount of available funds for any collection period and adversely affect the trust's ability to pay principal and interest on your notes. In addition, the career training loans are not secured by any collateral of the borrowers and are not insured by any guaranty agency or by an governmental agency . Consequently, if a borrower defaults on a career training loan, you will bear the risk of loss to the extent that the related reserve account or other credit enhancement are insufficient to cover such default."
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