Student Debt as an Asset Class

Interesting way to finance graduate school with startups like SoFi and CommonBond.

“This year a graduate student can borrow up to $20,500 in a Stafford loan from Uncle Sam at a fixed rate of 6.21% and the balance of his school’s costs in a Direct Plus Loan at 7.21%. (Direct Plus Loans made from 2006 until 2013 carried an even steeper rate: 7.9%.) The government offers no refinancing deals for high earners but charges no penalty for early repayment.”

Interesting reference in the article to cherry-picking and adverse selection similar to Paul Oyer’s post at HBR.


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