"Subprime lending" helps send student defaults higher. Defaults on private student loans topped $8B last year, a government report released yesterday said. The amount has risen over the last ten years due to aggressive marketing by lenders to borrowers, some of whom couldn't afford the debt. "Subprime-style lending went to college and now students are paying the price," Education secretary Arne Duncan said.
I'm showing far more positives comming from this sector. In fact, well educated people are more likely to pay their bills on time and typically find higher paying jobs. Additionally most jobs in todays market require a credit check which provides these graduating students with even more reasons to pay their bills on time. Additionally most of the $8B in defaults that you mentioned where FASFA student loans which were secured by the government. SLM no longer offers FASFA loans. They are a private lender and as such do not offer "Subprime" loans to students. If I were you I would cover that short position and go long on this stock. Each time the price falls I double my shares and will continue to do so until I can no longer afford to buy more. At that point I will sit back, collect my dividends and enjoy the ride back up.