If you have extra cash, you might be choosing between investing in the stock market or "buying back" your own debt by paying it off early. Investing in the Student Loan Marketing Association (SLMA)
: As long as students pay their monthly bills, investors receive steady income.
: These are the standard way for sophisticated investors to gain exposure. They often include private student loans or older FFELP loans that are 97–98% guaranteed by the government. buy student loans
: If many borrowers stop paying at once, the value of the security drops.
When people talk about "buying student loans," they usually mean one of two very different things: taking out a loan to pay for school or buying existing debt as an investment. This post explores the side of the market where student debt is treated as a financial asset. What Does it Mean to "Buy" Student Loan Debt? If you have extra cash, you might be
: Some specialist managers buy delinquent or defaulted loans at a massive discount—sometimes as low as 6 to 8 cents on the dollar —and profit by rehabilitating those loans into "reperforming" status. Why (or Why Not) Invest? Investing in student debt is a complex "risk-reward" game. The Pros :
The Guide to Buying Student Loans: Investing in the Future (and the Debt) They often include private student loans or older
: New laws regarding student loan forgiveness or bankruptcy rules can suddenly change the value of the debt you've "bought". Should You Just Pay Off Your Own Loans Instead?