It would be interesting to explore what kind of short positions are possible. The majority of student debt is federal, so you would probably be looking at the big private issuers like Nelnet and Sallie Mae/Navient (https://www.navient.com/about/investors/debtasset/).
I don't know if there is much of a CDO/CDS market anymore for student-loan debt because subsidies ended some years ago. Lending standards have probably tightened as a result, but it's possible that there are some student-loan backed securities out there with a high probability of default.
I've thought about shorting Navient/Sallie Mae directly, but their ties to the federal government make me think that they could possibly benefit from a government bail-out or takeover if it came to it.
There's also the possibility of taking a short position on the for-profit education industry. Institutions (or rather Companies) like DeVry and University of Phoenix probably have some of the highest debt and default rates. If they lose federal funding, their future is grim.
I don't know if there is much of a CDO/CDS market anymore for student-loan debt because subsidies ended some years ago. Lending standards have probably tightened as a result, but it's possible that there are some student-loan backed securities out there with a high probability of default.
I've thought about shorting Navient/Sallie Mae directly, but their ties to the federal government make me think that they could possibly benefit from a government bail-out or takeover if it came to it.
There's also the possibility of taking a short position on the for-profit education industry. Institutions (or rather Companies) like DeVry and University of Phoenix probably have some of the highest debt and default rates. If they lose federal funding, their future is grim.