But there are also creditors as well. Think of grandparents who have a 401k for retirement. Through the interconnectedness of the financial system, a component of their retirement income will depend on payback of those "bad" college loans.
I don't know about "most", but it is probably safe to say "many."
Sallie Mae retains ownership of 25% of all outstanding student loan debt. If the debt was forgiven, I think it is safe to presume their equity stock price would go to 0.
Look here for the largest holders of that stock:
They might; I doubt they do directly. The emphasis is on the "interconnectedness". After five or so hops ( A invests in B ->C->D->E ), you don't much know any more.
Comments
Do most 401Ks really invest in student debt?
I don't know about "most", but it is probably safe to say "many." Sallie Mae retains ownership of 25% of all outstanding student loan debt. If the debt was forgiven, I think it is safe to presume their equity stock price would go to 0. Look here for the largest holders of that stock:
https://finance.yahoo.com/q/mh?s=SLM+Major+Holders
Much of the other 75% is I'm sure also distributed into many other common mutual funds that are used in people's 401k plans.
It's trillions of dollars, and every penny of it is held as an asset on someone's balance sheet. Do you think it's confined to "greedy bankers"?
They might; I doubt they do directly. The emphasis is on the "interconnectedness". After five or so hops ( A invests in B ->C->D->E ), you don't much know any more.