When you ask most people what SLABS are, they tend to reply, "That's the big concrete thing under my house, right?" Yeah. That concrete slab (if you don't have a basement), is one kind of slab. But the SLABS explained in this short, and very well explained video, are Student Loan Asset Back Securities.
These are the investments that are created from a whole bunch of student loans. If nearly everyone is paying their student loans back on time, they're quite safe. But we're in weird times, and not everyone's paying their student loans back on time. The problem I see with SLABS is that they're nearly identical to the subprime Mortgage Backed Securities that crashed, and brought the banking system to its knees in 2008. Except that there are over $1.6 trillion in student loans, as opposed to $1.3 trillion in subprime mortgages in 2008. $1.3 trillion of those student loans are through the federal government, the rest are from private lenders.
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