Summary of Subprime Goes to College
Testimony Before the U.S. Senate Committee on Health, Education, Labor and Pensions
The for-profit education sector closely resembles the subprime mortgage industry that precipitated the 2008 financial crisis.
In this 2010 US Senate testimony, Steven Eisman predicted what could become the next big financial bubble to burst: student loans. Eisman – an American money manager who famously made millions betting against subprime mortgages – argues that the extreme growth of the for-profit higher education industry, fueled by student loans, parallels that of the subprime mortgage industry whose collapse triggered the 2008 global financial crisis. His testimony ultimately spurred Department of Education reforms, serving as an important reminder of the power of government regulation to mitigate unchecked greed and its devastating economic impact. getAbstract recommends Eisman’s insights to those who want to understand the financial risks posed by for-profit education.
In this summary, you will learn
- Why the for-profit education industry has exploded since 2000
- How it parallels the 2008 subprime mortgage crisis
- How to fix the education industry
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