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SleepyHead

Student Loans Bubble Bursting

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The student loan bubble is starting to burst

http://www.cnbc.com/id/101012270

The largest bank in the United States will stop making student loans in a few weeks.

JPMorgan Chase has sent a memorandum to colleges notifying them that the bank will stop making new student loans in October, according to Reuters.

The official reason is quite bland. "We just don't see this as a market that we can significantly grow," Thasunda Duckett tells Reuters. Duckett is the chief executive for auto and student loans at Chase, which means she's basically delivering the news that a large part of her business is getting closed down.

The move is eerily reminiscent of the subprime shutdown that happened in 2007. Each time a bank shuttered its subprime unit, the news was presented in much the same way that JPMorgan is spinning the end of its student lending.

Edited by DogTired

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"We just don't see this as a market that we can significantly grow,"

Isn't it currently growing exponentially and the fees Uni's are charging going up each year?

Sounds like they are wanting to bailout before the losses mount, they must be expecting a large number of current students to start defaulting in the future?

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To quote Peter Schiff

"If you've got $100,000 in student loans, and you majored in philosophy, then you ain't good for that money." Peter Schiff

Edited by DogTired

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Isn't it currently growing exponentially and the fees Uni's are charging going up each year?

Sounds like they are wanting to bailout before the losses mount, they must be expecting a large number of current students to start defaulting in the future?

I think the Uni's have been anticipating fees going up exponentially. Which tells us a lot about the level of intelligence in these universities.

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I think the Uni's have been anticipating fees going up exponentially. Which tells us a lot about the level of intelligence in these universities.

....question?.....if they keep creating/printing new money where does that money go? ;)

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I think the Uni's have been anticipating fees going up exponentially. Which tells us a lot about the level of intelligence in these universities.

JPM have just told them them they ain't as clever as they thought and the punch has just run out.

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Of course the story in the OP is from the US.

In the UK student loans are not currently provided by private sector institutions.

The Government has plans to change this - see e.g. the New Statesman http://www.newstatesman.com/economics/2013/06/danny-alexander-confirms-student-loan-book-will-be-privatised

I'm sure their plan will work just fine.

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I think the Uni's have been anticipating fees going up exponentially. Which tells us a lot about the level of intelligence in these universities.

University Administrators, at least.

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University Administrators, at least.

at least one husband of a Maths teacher thinks the same of house prices...or used to...double every 7 years.

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