Student loan debt burdens 44 million people in the United States. However for CEOs of student loan companies, or investors on Wall Street, student debt is a lucrative commodity to be bought and sold for profit.
Corporations such as Navient, Nelnet, and PHEAA service outstanding student debt on behalf of the Department of Education. These companies also issue Student Loan Asset-Backed Securities (SLABS) in collaboration with major financial institutions like Wells Fargo, JP Morgan, and Goldman Sachs. For these firms and their creditors, debt isn’t just an asset, it’s their bottom line.
Investors holding SLABS are entitled to coupon payments at regular intervals until the security reaches final maturity, or they can trade the assets in speculative secondary markets. There is even a forum where SLABS investors can anonymously discuss their assets and transactions, free from unwanted public scrutiny.
