Hedge fund managers who trade in student loan debt have a suggestion, reports the WSJ: forget that English degree.
Daniel Ades, managing director of Kawa Capital Management, says he is avoiding the debt of 2010 and 2011 graduates “because we can’t quantify the risk.”
A Barclays director tells the WSJ that they are expecting loan defaults of 30% to 40% for students graduating now, a spike from the usual rate of 25% to 30%.
The report draws a striking conclusion: “In the current economy, it may make more sense to enter a technical college than to go to law school.” The data is hard to argue with:
“Tuition at public two-year colleges in the U.S. will cost $2,963 on average in the 2011 academic year, compared to $28,500 for four-year private colleges, according to estimates by non-profit group The College Board.”
Of course, law students borrow even more.
This only applies if you can get a loan at all. The market is so spooked about student debt that Sallie Mae loan volume is down to 16% of its 2009 level, the WSJ reports.
Now check out our slideshow: 19 Alarming Facts About The Crushing Weight Of Student Loans >>