In the poor job market, investors in the debt bond market see recent college graduates as a bad bet
Matt Wirz writes for the Wall Street Journal that the bond vigilantes may not be sniffing any price inflation but players in the student debt market are deeply discounting the job prospects for recent college grads.
Skip to next paragraph Mises Economics BlogThis is the institutional blog of the Ludwig von Mises Institute and many of its affiliated writers and scholars commenting on economic affairs of the day.
Recent posts
The assumed default rate on students loans has moved from 25% to 30% upward to between 30% and 40%. Failure to graduate is the most important factor in whether a graduate pays back a loan. Over 20% of Americans between the ages of 20 and 24 without a college degree are unemployed. The rate is 8% for those of the same age with degrees.
Investors also take a dim view of buying the ever increasing debt of a perpetual student. ?When you see a guy in a loan made in 2005 that is still in school, you throw that away,? said investor Rubin Bahar, of Eagle Asset Management.
So what are the best bets when buying student debt? Technical schools. Students pay the least for their education with the potential to make good money after graduation in only a couple of years.
By that arithmetic, technical colleges come out on top, Mr. [Daniel] Ades said. ?We?re in a skills based economy and what we need is more computer programmers, more [nurses],? he said. ?It?s less glamorous but it?s what we need.?
Meanwhile the nation?s law schools continue to over-supply the nation with lawyers. Law students are borrowing an average of $68,827 at state schools and $106,249 a private schools only to add to the glut of barristers.
The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on blog.mises.org.
dorothy rodham rick hendrick plane crash marco rubio marco rubio no shave november kevin durant miranda lambert
No comments:
Post a Comment